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FX OPTION EXPIRY (updated)

POLAND

CPI Inflation Rises By 5% In July

GERMAN DATA

German GDP Rebounded in Q2, But Lower Than Expected

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Italian GDP Beats Expectations On Upside

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     POLICY: China and the U.S. are maintaining close communication, Ministry of
Commerce spokesman Gao Feng said at a regular briefing on Thursday. Gao also
reiterated that a phase-one deal with the U.S. needs to include a commitment to
removing some extra tariffs imposed since last year. China has shown its
opposition on the U.S. passing Hong Kong and Xinjiang-related bills, Gao said
without elaborating, when asked whether China will retaliate by publishing a
list of "non-reliable entities" hitting American companies. 
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
for the 12th day, leaving liquidity unchanged with no reverse repos maturing
today, according to Wind Information. Liquidity in the banking system is
"reasonable and ample" enough to offset banks' payment of required reserves and
the issuance of government bonds, the PBOC said on its website.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.3142% from Wednesday's close at 2.2065%, Wind
Information showed. The overnight repo average fell to 1.9024% from 1.9575%. 
     YUAN: The yuan strengthened to 7.0425 against the dollar from Wednesday's
close of 7.0699. PBOC set the dollar-yuan central parity rate higher for a
second day at 7.0521, compared with Wednesday's 7.0382. 
     BONDS: The yield on 10-year China Government Bond was last at 3.1875%, down
from the close of 3.1925% on Wednesday, according to Wind Information.
     STOCKS: The benchmark Shanghai Composite Index gained 0.74% to 2,899.47,
led by technology shares. Hong Kong's Hang Seng Index increased 0.59% to
26,217.04.
     FROM THE PRESS: China should prioritize and boost employment by expanding
consumption and stabilising imports and exports, according to the summary of the
weekly State Council meeting chaired by Premier Li Keqiang held yesterday,
carried by Xinhua News Agency. Local governments should lower the threshold for
small companies obtaining entrepreneurial loan guarantees, and provide funding
support for migrant workers setting up businesses in their hometowns, Xinhua
reported.
     The prices of China's industrial products may begin to recover in Q4 helped
by the slowly improving demand in both the domestic and overseas markets, the
Securities Times said in a commentary. Investment in high-tech manufacturing
continues to grow in recent months, as manufacturers in electronic, equipment,
medicine and instrumentation add R&D spending after the U.S restricted China's
access to its technology, the newspaper said citing a report by Industrial
Securities. The early issuance of local government special bonds targeted at
boosting investment in infrastructure and the stabilizing U.S. economy will help
exports, the newspaper said.
--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$$$]