Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
Reporting on key macro data at the time of release.
Real-time insight on key fixed income and fx markets.
- Emerging MarketsEmerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
- MNI ResearchMNI Research
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
- About Us
BEIJING (MNI) - POLICY: The People's Bank of China (PBOC) will cut the
reserve requirement ratios of financial institutions across the board by 0.5
percentage point from Jan 6, according to a statement on the central bank's
website on Wednesday. The countercyclical rate cut will release CNY800 billion
long-term funds and is intended to support the real economy and lower social
financing costs, the PBOC said.
DATA: The Caixin China manufacturing Purchasing Managers Index (PMI) edged
down for the first time in six months to 51.5 in December from November's 51.8.
The index still stayed in expansion and was higher than in the first three
quarters, Caixin said. New orders sub-index fell to a three-month low and new
export orders declined slightly, though both stayed above 50. Improving domestic
and overseas demand drove expansion in production and output, Caixin said.
LIQUIDITY: The PBOC skipped open market operations on Thursday, resulting
in a net drain of CNY400 billion given the same amount of reverse repos matured
today, according to Wind Information. Total liquidity in the banking system is
at a relatively high level, enough to offset the maturity of reverse repos, PBOC
said on its website.
RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) fell to 1.9853% from Tuesday's close of 2.8110%, data by
Wind Information showed. The overnight repo average decreased to 1.3909% from
YUAN: The currency strengthened to 6.9631 against the dollar from Tuesday's
close of 6.9662. PBOC set the dollar-yuan central parity rate lower at 6.9614 on
the first trading day of 2020, from 6.9762 before the N.
BONDS: The yield on 10-year China Government Bonds was last at 3.1700%, up
from Tuesday's close of 3.1550%, according to Wind Information.
STOCKS: The Shanghai Composite Index gained 1.15% to 3,085.20, boost by the
upcoming reserve requirement ratio cut announced yesterday. Hong Kong's Hang
Seng Index rallied 1.25% to 28,543.52.
FROM THE PRESS: The PBOC is expected to make further cuts to reserve
requirement ratios after scheduled 0.5 pp cut on Jan 6, the China Securities
Journal reported citing Wang Qing, the chief macroeconomic analyst at credit
rating agency Dongfang Jincheng. The central bank may conduct medium-term
lending facilities (MLFs) to add liquidity during the Chinese New Year at the
end of January to meet increased cash demand, the newspaper said citing Liao
Zhiming, the chief banking analyst at Tianfeng Securities.
Ten provinces including Sichuan and Henan are planning to issue CNY229.3
billion infrastructure-backed local government special bonds in January, the
China Securities Journal reported. The bond issuance may reach CNY410 billion in
January and total CNY3.35 trillion in 2020, the journal said citing Ming Ming,
chief fixed-income analyst at CITIC Securities. Funds raised are largely used to
support urban and rural infrastructure construction, ecological environmental
protection, water conservation and social welfare projects, Ming was cited as
China must take more measures to ensure stable growth at around 6%, the
Economic Daily reported citing Feng Qiaobin, the deputy director of the
macroeconomic research department at the Development Research Center of the
State Council. China will issue CNY3.15 trillion of new local government
special-purpose bonds to support a number of infrastructure projects, including
the Sichuan-Tibet railway in a bid to boost investment and stabilize growth, the
newspaper cited Feng as saying.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: firstname.lastname@example.org
--MNI Beijing Bureau; +86 10 8532 5998; email: email@example.com