MNI China Daily Summary: Monday, May 6

POLICY: China saw 295 million domestic trips made during the May day holiday, up 7.6% y/y and 28.2% on 2019, according to a statement from the Ministry of Culture and Tourism. Domestic tourist expenditure amounted to CNY166.89 billion, up 12.7% y/y and up 13.5% from 2019, while inbound tourists totalled 1.78 million and outbound stood at 1.90 million.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY2 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The operation has led to a net drain of CNY8 billion after offsetting the maturity of CNY10 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.8782% from 2.1098%, Wind Information showed. The overnight repo average decreased to 1.7651% from 1.9374%.

YUAN: The currency strengthened to 7.2137 against the dollar from 7.2416 on Friday. The PBOC set the dollar-yuan central parity rate lower at 7.0994, compared with 7.1063 set before May Day holiday. The fixing was estimated at 7.2106 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bond was last at 2.3100%, down from the previous close of 2.3494%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index rose 1.16% to 3,140.72 while the CSI300 index gained 1.48% to 3,657.88. The Hang Seng Index edged up 0.55% to 18,578.30.

FROM THE PRESS: China stocks could continue trending upward driven by the CPC Politburo meeting's positive tone in late April and the U.S. Federal Reserve's more dovish stance, Securities Times reported citing analysts. Global funds have a strong willingness to allocate to Chinese assets with risk appetite increasing significantly, said CITIC Securities. The Hang Seng Index also surged for nine consecutive days, while the Nasdaq China Golden Dragon Index set a new closing high since November with a cumulative rise of over 8% over May 1-3, the newspaper said.

The China Commodity Price Index reached 115.4 points in April, up 3% m/m and down 0.4% y/y, according to the China Federation of Logistics and Purchasing (CFLP). Authorities' implementation of macroeconomic policy to drive domestic demand was gradually emerging as the CBPI had risen for two consecutive months, a CFLP representative said. Simultaneously, the nonferrous and chemical price index increased in April, providing strong support for the PPI index going forward. (Source: Securities Daily)

President Xi plans to exchange views with President Macron on the development of China-French and China-European relations as well as major international and regional issues, according to a written speech delivered upon arrival in Paris. Xinhua, a state news agency, said Sino-French trade has grown 5.9% on average annually since 2019, with France a major source for Beijing’s imports of airplanes and aircraft parts. China imported CNY46.95 billion of agricultural products from France in 2023, up 50.5% over 2019 and more than any other EU nation.