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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessMNI China Daily Summary: Friday, November 3
EXCLUSIVE: China will bring forward part of its roughly CNY3 trillion 2024 quota for issuance of infrastructure-backed local-government “special bonds” to the beginning of next year to ensure investment retains momentum, policy advisors and market analysts told MNI.
POLICY: China remains committed to work with EU member nations to accelerate green transformation and achieve energy conservation and emission reduction, according to Shu Jueting, spokesperson for the Ministry of Commerce.
POLICY: China's carmakers occupied 9.9% of the EU new energy vehicle market in Q3, according to Cui Dongshu, secretary general of the China Passenger Association. The EU stated China's EV market share stood at 8% in its most recent communication, but did not specify the exact timeframe. Cui expects EU demand to remain strong, despite the ongoing EU anti-subsidy probe into China's NEVs.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY43 billion via 7-day reverse repo, with the rate unchanged at 1.80%. The operation has led to a net drain of CNY456 billion after offsetting the maturity of CNY499 billion reverse repos today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.7564% from 1.8283% on Thursday, Wind Information showed. The overnight repo average rose to 1.6228% from the previous 1.4764%.
YUAN: The currency slightly strengthened to 7.3133 against the dollar from 7.3186 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 7.1796, compared with 7.1797 set on Thursday. The fixing was estimated at 7.3134 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bond was last at 2.6925%, up from Thursday's close of 2.6850%, according to Wind Information.
STOCKS: The Shanghai Composite Index rose 0.71% to 3,030.80 while the CSI300 index gained 0.84% to 3,584.14. Hang Seng Index rallied 2.52% to 17,664.12.
FROM THE PRESS: China will firm efforts to attract foreign investment including more engagement and help accessing investment opportunities and policy promotions, according to Shu Jueting, spokesperson for the Ministry of Commerce (MOFCOM). Foreign investment in China from January-September was CNY919 y/y, a 8.4% decrease, MOFCOM said. Cui Fan, a professor at the School of International Economics and Trade, believes the uncertainty and complexity within the global economy drove the decrease and China should open further to foreign investment and improve the business environment (Source: 21st Century Business Herald).
The potential end of the U.S. Federal Reserve's interest rate hikes could bring overseas capital back to the A-share market and support the rebound of the yuan, 21st Century Business Herald reported, citing market insiders. The net inflow of northbound funds into A-shares exceeded CNY4 billion on Thursday. Many Wall Street investment institutions predict the yuan will rebound to 7-7.1 against the U.S. by the end of Q1 2024, as the Fed lowers its benchmark interest rate to 4.5%, which will significantly narrow the China-U.S. interest-rate spread, said an unnamed Wall Street hedge fund manager. Traders see less than 15% chance of Fed raising rates in December, after it held rates at 5.25%-5.5% on Wednesday.
Local governments issued CNY8.5 trillion of public bonds in the first 10 months of 2023, a new record, according to Yicai news agency. The total volume consisted of CNY4 trillion in refinancing bonds, up 74% y/y. Zhang Yu, chief macro analyst of Huachuang Securities, said the government will continue to exert strong fiscal policy in the near future with newly announced CNY1 trillion treasury bonds and advancing up to CNY2.28 trillion of bonds from 2024. Other analysts said officials are more reliant on debt fuelled fiscal policy this year as a slow recovery and poor land sales have led to falling local government revenue. (Source: Yicai)
China sold 890,000 new electric vehicles in October, up 32% y/y, according to the Passenger Transport Association. The market showed a strong increase due to low base effects from last year and manufacturers engaging in promotional activity. Buyers have purchased 6.8 million vehicles so far in 2023, a y/y increase of 36%, the association added. China looks set to maintain strong NEV exports in future, the association added. (Source: Yicai)
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.