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BOND SUMMARY

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COMMODITIES

Silver Up Sharply As USD Weakens

     EXCLUSIVE: China is likely to set GDP growth target for 2020 at 6% or
higher unless the global economic outlook deteriorates further, people close to
policy-making circles told MNI, as the government seeks to meet objectives under
its strategic development plan. The central government will "fix economic growth
at 6% for next year," said one person close to policy makers who requested
anonymity. "The target will be close to the potential growth rate of the Chinese
economy."
     DATA: China's Aggregate financing to the economy fell to CNY618.9 billion
from CNY2.27 trillion in September, the lowest since July 2016, less than the
forecast of CNY950 billion. New loans totalled CNY661.3 billion versus CNY800
billion projection and down from September's eight-month high CNY1.69 trillion.
M2 rose 8.4% y/y last month, flat from gain in September, in line with market
consensus.
     LIQUIDITY: PBOC skipped open market operations for the fourth trading day,
leaving liquidity unchanged, according to Wind Information. The level of
liquidity in the banking system is relatively high, PBOC said.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) increased to 2.4963% from Friday's close of 2.4651%, Wind
Information showed. The overnight repo average rose to 2.0296% from Friday's
1.8974%.
     YUAN: The yuan weakened to 7.0065 against the U.S. dollar from Friday's
close of 6.9884. PBOC set the dollar-yuan central parity rate higher for fourth
day at 6.9933 on Monday, the strongest since Aug 6, 2019. It was 6.9945 on
Friday.
     BONDS: The yield on 10-year China Government Bond was last at 3.2100%, down
from Friday's close of 3.2625%, according to Wind Information. 
     STOCKS: China and Hong Kong stocks fell amid concerns over worsening
political unrest after Hong Kong police fired at least one protestor today. The
Shanghai Composite Index tumbled 1.83% to 2,909.97, while the Hang Seng Index
dropped 2.62% to 26,926.55, the steepest single-day drop in about four months.
     FROM THE PRESS: China won't rush to reach a deal with the U.S., as it
doesn't believe a deal will fundamentally change China-U.S. economic relations,
the Global Times said in an editorial on Sunday in response to President Donald
Trump saying China wants a deal more than the U.S. Trump, who disparaged China's
supply chain as "all broken like an egg", was exaggerating U.S. strength to
cover up its own downturn, it said. 
     China's full opening-up of its financial sector will help stabilizing the
yuan in the long term, the Economic Information Daily said. More foreign
investors in the Chinese market will help smoothen the flow of cross-border
funds, lending fundamental support to the yuan, the newspaper said.
     China's inflation is expected to remain high into the first quarter next
year, and some monthly reading may exceed 4% y/y from 3.8% in October, the
Shanghai Securities Journal reported citing Liu Xuezhi, a senior analyst at the
Bank of Communications. Pork prices will continue to be the main driver for
rising CPI, the newspaper said.
     China's regulators should help small and medium-sized banks manage risks,
improve corporate governance, guide them to lend more to the real economy and
projects related to the actual needs of the people, Sina Finance reported citing
Zhou Liang, a vice chairman of the China Banking and Insurance Regulatory
Commission. China's banking industry is developing steadily despite instances of
some small banks running into difficulties, the newspaper cited Zhou as saying.
     Chinese commercial banks must deepen supply-side reform to better serve
quality development of the economy, said Economic Daily in a commentary. Banks
failed to meet the needs of private and small companies for financial services,
but instead leaned too heavily on local governments, state-owned enterprises and
real estate industry, the newspaper said. Banks give too much credit to
state-backed borrowers and lack the ability to detect risks of rapidly rising
leverage ratios, the newspaper said.
     China's slumping automobile sales and production improved slightly in
October from September. Sales dropped 4% Y/Y to 2.295 million units compared
with -5.2% in September, while production fell 1.7% Y/Y versus -6.2%, according
to data published by the China Association of Automobile Manufacturers. Total
production for the first 10 months dropped 10.4% Y/Y to 20.44 million while
sales were down 9.7% to 20.65 million, the data showed.
--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$$$]