DATA: China's March consumer price index rose 1.5% y/y, accelerating from February's 0.9% and outshining a 1.4% forecast driven by rising energy prices, data from the National Bureau of Statistics on Monday showed. The producer price index measuring factory gate prices further eased for the fifth month to 8.3% y/y from January's 8.8% y/y, but higher than the 8.1% forecast. On a monthly basis, PPI gained 1.1%, quickening from February's 0.5% due to higher input costs from oil and non-ferrous metals among others, the NBS said.
DATA: China's M2 money supply growth quickened to 9.7% y/y in March from February's 9.2%, beating the 9.2% forecast by market analysts, the People's Bank of China (PBOC) data showed. New loans rose by CNY3.13 trillion, nearly tripling on February's CNY1.23 trillion and outshining the CNY2.78 trillion forecast. Aggregate financing, much more than the expected level, jumped to CNY4.65 trillion when compared to the previous CNY1.19 trillion, standing at the second-highest level this year.
LIQUIDITY: The PBOC injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.1%. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.9075% from 1.9397% on Friday, Wind Information showed. The overnight repo average increased to 1.8395% from the previous 1.7353%.
YUAN: The currency weakened to 6.3699 against the dollar from 6.3637 on Friday. The PBOC set the dollar-yuan central parity rate lower at 6.3645, compared with 6.3653 set on Friday.
BONDS: The yield on 10-year China Government Bond was last at 2.8025%, up from Friday's close of 2.7925%, according to Wind Information.
STOCKS: The Shanghai Composite Index tumbled 2.61% to 3,167.13 while the CSI300 index lost 3.09% to 4,100.07. Hang Seng Index fell 3.03% to 21,208.30.
FROM THE PRESS: China has room to cut both banks’ reserve requirement ratios and interest rates in order to reduce financing costs of the real economy, said Guan Tao, the chief economist at BOC International, the Securities Times reported. Monetary policies must be accurate and targeted, Guan said. The economy could see a significant rebound in Q2 with the easing of pandemic measures and more investments, Guan said. China’s inflation could face some imported pressure as well as internal supply chain snags, so keeping inflation stable is also a major target, Guan said. China could use active fiscal policies to increase government investment leverage and improve private investment and consumption, said Guan.
China must stick to “zero covid” policies to prevent a large-scale return of the pandemic, the official People’s Daily said in a commentary. Giving up in the face of the pandemic means surrendering and placing everyone’s life and safety at extreme risks, it said. While some have said the pandemic has destroyed lives and loosening up is acceptable given the Omicron’s less severe case, these thoughts are wrong and must be corrected, the newspaper said.
China on Sunday unveiled guidelines for accelerating the building of a unified national market that is highly efficient, rule-based, fair for competition, and open, Xinhua News Agency reported. It includes the accelerated development of a unified capital market, including an improved supervision system with clear rights and responsibilities, and setting up "dos and don’ts" to prevent the disorderly expansion of capital. The guideline also calls for promoting a free-flow bond market infrastructure, Xinhua reported.
