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BOND SUMMARY

Gilts/Core EGBs Bid Ahead of BoE

EQUITIES

Muted Open, S&P Futures Parameters Unchanged

OPTIONS

Larger FX Option Pipeline

COMMODITIES

Oil Moderating, Futures Curve Still Strong

GLOBAL POLITICAL RISK

EU, France Ease Up On Vaccine IP After US States Support

     LPR: The People's Bank of China (PBOC) kept the benchmark one-year Loan
Prime Rate (LPR) unchanged at 3.85% and five-year LPR also unchanged at 4.65% on
Monday, according to a statement on its website. The PBOC has maintained the
same benchmark rates for three months after cutting one-year LPR by 20 bps and
five-year LPR by 10 bps on April 20.
     LIQUIDITY: The PBOC injected CNY50 billion via 7-day reverse repos with
rates unchanged. This resulted in a net injection of CNY50 billion from reverse
repos matured, 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 2.1523% from Friday's close of 2.2396%, Wind
Information showed. The overnight repo average decreased to 1.9341% from the
previous 2.3071%.
     YUAN: The currency strengthened to 6.9904 against the dollar from 7.0002 on
Friday. The PBOC set the dollar-yuan central parity rate at 6.9928 on Monday,
down from 7.0043 set on Friday.
     BONDS: The yield on 10-year China Government Bond was last at 2.9200%, down
from the close of 2.9500% on Friday, according to Wind Information. 
     STOCKS: The Shanghai Composite Index rallied 3.11% to 3,314.15. Hang Seng
Index lost 0.12% to 25,057.99.
     FROM THE PRESS: The U.S. government may limit the use of the SWIFT payments
system by certain Chinese financial institutions, though it is less likely to
extend the ban to Hong Kong or mainland China entirely, the Securities Daily
reported citing analysts. China may also build a competitive "backup" payment
and settlement system to include the trading of energy, grain, minerals and raw
materials closely related to national security, the newspaper said citing Zheng
Liansheng, a senior researcher at the National Institution for Finance &
Development.
     China must maintain the stability of the housing market by keeping
restrictions on home purchases and mortgage loans while increasing the supply of
housing, the Economic Information Daily reported citing Sheng Songcheng, a
counsellor to the Shanghai Municipal Government. Housing policies should follow
the central government's principle that "housing is for living not speculating",
even amid the epidemic, the daily said citing Song. Increasing demand for
housing in the next decade will sustain a stable market over the long term,
Sheng added. 
     China is pushing towards a more unified bond market following a Sunday PBOC
announcement to allow investors to trade in both the previously disconnected
interbank and exchange bond markets, the Financial News reported citing an
unidentified central bank official. The new bond market structure promotes the
free flow of capital and smoothens the implementation of policies, the official
told the newspaper. 
--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$$$]