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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

POLICY: China State Railway Group, formerly known as the Ministry of Railways, lowered its estimate of passengers traveling during the Chinese New Year to 296 million from the previous 407 million with train ticket sales falling 60% year on year, according to state news agency Xinhua. The Chinese government has urged people to cancel the traditional family gathering due to Covid-19 outbreaks across the country. Railways are the primary choice for people to travel across the country during the festive period.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY500 billion via one-year medium-term lending facility (MLF) with the rate unchanged at 2.95% on Tuesday. This aims to roll over the CNY300 billion of MLFs maturing today and CNY240.5 billion of Targeted Medium-term Lending Facilities (TMLF) maturing later this month, the PBOC said on its website. The PBOC also injected CNY2 billion via 7-day reverse repos. In total, the central bank net injected CNY197 billion as CNY5 billion repos mature today.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.0109% from the 1.9488% on Thursday, Wind Information showed. The overnight repo average increased to 1.7528% from the previous 1.6684%.

YUAN: The currency slightly weakened to 6.4752 against the dollar from 6.4678 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.4633, comparing with the 6.4746 set on Thursday.

BONDS: The yield on 10-year China Government Bond was last at 3.1925%, up from Thursday' 3.1550%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.01% to 3,566.38 while the CSI300 index declined by 0.23% to 5,4458.08. Hang Seng Index increased by 0.27% to 28,573.86.

FROM THE PRESS: The China-U.S. relationship may improve under a new U.S. president, giving Canberra a chance to repair the relationship with China, the China Daily said in an editorial. Canberra followed the outgoing US administration's lead to be tough on China and this had ruined the past China-Australia economic cooperation which was characterized by mutual benefits, the newspaper said. A recent decision to block the Chinese acquisition of an Australian construction company for national security reasons only worsened the soured relationship, the editorial said.

China's GDP growth in 2020 Q4 may have accelerated past 6.2% from 4.9% in Q3 as strong exports aided the economic recovery and increased domestic demand, the Economic Information Daily reported citing Hua Changchun, chief economist from Guotai Junan Securities. Annual fixed asset investment is expected to have expanded 3.2% supported by real estate as well as manufacturing, which benefited from policy support and improving profitability, the newspaper reported citing Li Chao, chief economist of Zheshang Securities.