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USD

Pares gains against all G10s

CZECHIA

CNB Expected To Hike By Another 25bps Today

US TSY OPTIONS

Outright put buyer

EQUITIES

Estoxx futures edge towards session high

EQUITY TECHS

E-MINI S&P (U1): Modest Fade in Prices

GILTS

Opening calls

     EXCLUSIVE: China's policymakers should bolster the coronavirus-hit economy
by scaling back deleveraging moves, risking higher government borrowing levels
and an increased deficit-to-GDP ratio, policy advisors told MNI. "The
authorities should look to strike a balance (between economic growth and risk
prevention)," said Zhao Quanhou, director of the Financial Research Center at
the Chinese Academy of Fiscal Sciences, although he felt the current 3% deficit
cap would be maintained.
     POLICY: China said on Monday that there is no reason for measures
"interfering with international trade" as it copes with the coronavirus
outbreak. Local and central governments are actively taking measures to help
businesses, and some companies meeting the right conditions are resuming
production, Gao Feng, a Ministry of Commerce spokesman, said in a WeChat forum
with reporters.
     DATA: Inflation in China soared to 5.4% y/y in January from 4.5% in
December, exceeding 4.9% expected by economists. At the highest level since
October 2011, January's inflation was driven by Chinese New Year holiday and the
coronavirus outbreak, as well as the low basis of comparison from the same
period last year as this year's holiday was a month earlier than in 2019, the
National Bureau of Statistics said. Producer prices index rebounded to 0.1% y/y
from -0.5% in December, turning positive for the first time in 14 months.
     LIQUIDITY: The People's Bank of China (PBOC) injected CNY700 billion via
7-day reverse repos and CNY200 billion via 14-day reverse repos with rates
unchanged. This offset the maturity of CNY900 billion today, according to Wind
Information. The operations aim to counter the maturity of reverse repos and
maintain reasonable and ample liquidity in the banking system, PBOC said in a
statement on its website.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) increased to 2.1521% from Thursday's close of 2.1174%, Wind
Information showed. The overnight repo average fell to 1.5847% from the previous
1.6924%.
     YUAN: The currency strengthened to 6.9853 against the dollar from 6.9860 on
Friday. PBOC set the dollar-yuan central parity rate higher at 6.9863, compared
with last Friday's rate of 6.9768.
     BONDS: The yield on 10-year China Government Bond was last at 2.8150%, down
from the close of 2.8275% on Friday, according to Wind Information. 
     STOCKS: The Shanghai Composite Index gained 0.51% at 2,890.49. Hang Seng
Index lost 0.59% to 27,241.34.
     FROM THE PRESS: Financial regulators in China should tolerate an increase
in non-performing loans as service companies deal with the impact of the
coronavirus, according to a front-page commentary by the Economic Information
Daily. Regulators should adjust assessment indicators and encourage institutions
to funnel resources to companies participating in epidemic prevention or those
impacted by the epidemic, it said.
     Local authorities should resume or commence the construction of highway and
water carriage projects to help boost economic growth, the Ministry of
Transportation said in a statement. Most transportation projects should be
resumed before Feb. 20 except those in areas severely affected by the epidemic,
the ministry said.
     More than 80% of China's listed companies may resume operations this week
after the extended break caused by the coronavirus epidemic, the China
Securities Journal reported citing Liu Zhe, deputy head of the Wanb Institute.
Many companies still face supply-chain and transport disruptions, and also a
shortage of workers and a dearth of virus protection equipment such as masks,
the newspaper said citing Zhang Yu, chief macroeconomic analyst with Huachuang
Securities.
     All of China's major delivery companies, which support the country's
ecommerce, have started operating on Monday, with 40% of the industry's normal
capacity expected to return by Feb. 15, Jiemian News reported citing statements
from the companies. Delivery service in some regions will continue to face
challenges due to restrictions imposed against the New Coronavirus Pneumonia,
the newspaper said.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]