Bouncing Off Trend Low


Opens Gap With Recent Highs


Breaks Through Channel Base


Attention Remains On The Bear Channel Top


Approaching Key Support


Pulls Back From Key Resistance

     EXCLUSIVE: China, the biggest importer of natural gas and iron ore, should
develop yuan-denominated contracts for the commodities as it reinforces a
strategy to boost the currency's use in trade invoicing which could propel it
into third place behind the dollar and the euro in the global forex pecking
order within a decade, a government advisor told MNI. While tension with the
U.S. may dent the currency's attractiveness during 2020, the effect would be
only short term due to China's growing economic weight and as it builds on moves
to boost its presence in commodities pricing begun with the launch of crude oil
futures in March 2018, Zhang Ming, senior fellow at the Institute of World
Economic and Politics under the Chinese Academy of Social Sciences, said in an
     LIQUIDITY: The People's Bank of China (PBOC) injected CNY200 billion via
the one-year medium-term lending facility (MLF) on Monday with the rate
unchanged at 2.95%, according to a statement on the PBOC website. The operation
injected a net of CNY80 billion as CNY120 billion in reverse repos mature today,
according to Wind Information. The operation aims to keep liquidity in the
banking system reasonable ample, the PBOC said. 
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) decreased to 1.7775% from last Friday's close of 1.9066%,
Wind Information showed. The overnight repo average declined to 1.4730% from the
previous 1.5161%.
     YUAN: The currency weakened to 7.0946 against the dollar from 7.0745 on
last Friday. PBOC set the dollar-yuan central parity rate higher at 7.0902
compared with the 7.0865 set for last Friday.
     BONDS: The yield on 10-year China Government Bond was last at 2.7600%,
decreasing from the close of 2.7700% on last Friday, according to Wind
     STOCKS: The Shanghai Composite Index declined 1.02% to 2,890.03. Hang Seng
Index decreased 2.16% to 23776.95, marking a lowest point in two weeks.
     FROM THE PRESS: The People's Bank of China would choose the right time to
ease monetary policy by lowering reserve ratios or cutting interest rates, and
any easing should largely be "fine-tuning", according to the China Securities
Journal. In a front page commentary, the Journal said monetary easing should
continue because the economic recovery had some distance to go, with the May PPI
falling 3.7% y/y, a decline greater than in April.
     Beijing reported 72 new cases of the Covid-19 virus for Saturday and Sunday
all linked to the city's biggest agricultural wholesale market supplying about
80% of Beijing's foods and groceries, the Beijing Daily reported. Authority of
Fengtai district, where the market is located, is conducting tests of around
46,000 residents, and sent community workers to screen people who have visited
the market across Beijing, the newspaper said. Genome sequencing tests showed
that the Covid-19 virus may have been imported from Europe, according to
Beijing's Centre for Disease Control and Prevention.
     A joint-venture 50% owned by American Express received a bank card clearing
license on Saturday, making the credit card company the first foreign player in
the China cards market, China Securities Journal reported citing regulatory
authorities. Amex plans to start the new business this year, the newspaper said
citing the company. MasterCard also applied for the same business approval, the
journal said.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]