MNI China Daily Summary: Monday, November 13

DATA: New loans were the third lowest this year at CNY738.4 billion, outperforming the CNY660 billion expectation but lower than September's CNY2.31 trillion, the People's Bank of China (PBOC) data showed. Total social financing marked the smallest increase in recent three months to rise by CNY1.85 trillion, more than halved from CNY4.12 trillion in September and slightly missing the market consensus of CNY1.9 trillion. M2 money supply was unchanged from the previous 10.3% y/y, remaining at the lowest level since March 2022, compared to the 10.3% estimate.

LIQUIDITY: The PBOC conducted CNY113 billion via 7-day reverse repo, with the rate unchanged at 1.80%. The operation has led to a net injection of CNY95 billion after offsetting the maturity of CNY18 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.8774% from the previous 1.8470%, Wind Information showed. The overnight repo average increased to 1.7593% from the previous 1.6902%.

YUAN: The currency weakened to 7.2928 against the dollar from 7.2906 on Friday. The PBOC set the dollar-yuan central parity rate lower at 7.1769 on Monday, compared with 7.1771 set on Friday. The fixing was estimated at 7.2891 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bond was last at 2.6850%, up from the previous 2.6825%, according to Wind Information.

STOCKS: The Shanghai Composite Index rose 0.25% to 3,046.53, while the CSI300 index edged down 0.20% to 3,579.41. The Hang Seng Index gained 1.30% to 17,426.21.

FROM THE PRESS: Up to 26 provinces have disclosed plans to issue special refinancing bonds to swap out off-balance sheet debts, with the total volume reaching CNY1.26 trillion, according to the calculations of Securities Daily. Guizhou province temporarily ranks first with a scale of CNY144.8 billion, followed by Yunnan, Hunan, Inner Mongolia and Liaoning which have over CNY100 billion to issue each. The People’s Bank of China will likely cut the reserve requirement ratio in Q4 to support bond sales and credit expansion, said Li Mingjin, senior investment consultant at Shaanxi Jufeng Investment, who does not rule out the possibility of an interest rate cut.

Economists in China remain positive on the economy, with the Yicai Chief Economist Survey reading 50.84 in November, down from 50.89 last month, as participants expect strong upcoming data and for the economy to achieve this year's GDP growth target of 5%. Economists predicted average fixed-asset investment growth of 3.14% year-to-date in October, and for retail sales to grow 6.62% y/y, up 1.12 percentage points from September. Overall, experts said, despite recent positive signals, domestic demand remains low and more policy efforts are needed to boost market confidence. (Source: Yicai)

The U.S. and China have prepared "economic results" ahead of the San Francisco heads of state meeting this week which include an agreement to strengthen the international financial architecture and promote a meaningful quota increase for the International Monetary Fund, according to Vice Minister of Finance Liao Min. Speaking to Chinese media at the end of his trip to the U.S., where he accompanied Vice Premier He Lifeng, Liao said the U.S. and China have agreed to resist decoupling and develop healthy economic relations. China expressed concerns regarding the U.S.’s investment restrictions on China and sanctions that suppress Chinese companies, Liao added.