MNI China Daily Summary: Monday, June 15

     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

interview.

     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

Information. 

     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: archie.zhang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]