-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI China Daily Summary: Thursday, July 5
TOP NEWS: China will not initiate any tariff action before the USD34
billion tariff package is implemented this Friday, but China will be forced to
retaliate once the tariffs are enforced, China Ministry of Commerce said. U.S.
tariff actions "are not just firing at the world, but at U.S. itself," stressed
Gao, referring to potential damages in global supply and value chains.
TOP NEWS: Washington's recent decision to temporarily lift a ban on Chinese
tech giant ZTE should not be seen as a sign that the U.S. will back down from
its plans to impose tariffs on USD34 billion worth of Chinese goods from July 6,
a former U.S. trade official told MNI in an interview.
TOP NEWS: The People's Bank of China (PBOC) should not intervene in the
forex market, as economic fundamentals are still supportive and capital outflow
pressures are not large, Zhang Bin, director of the Global Macro economy
Research Division of the Chinese Academy of Social Sciences, told MNI. "The
central bank should not restart the forex counter-cyclical factor, because as
long as the factor is in place, the pricing mechanism of would be disturbed,"
Zhang said.
YUAN: While policymakers' willingness to prevent a yuan collapse is no
doubt positive for the currency, their ability to prevent further medium-term
weakness is questionable. The big picture is that China's economy is coming off
the back of a major credit boom and low or negative real interest rates will be
necessary and desired in order to prevent a destabilizing deleveraging cycle. In
this context, the recent 3% drop in the currency's real effective exchange rate
is not particularly large.
LIQUIDITY: The PBOC skipped open market operations on Thursday, stating on
its website that a relatively high level of liquidity can absorb maturing
reverse repos. That resulted in a net drain of CNY140 billion, as the same
amount of reverse repos matured today, according to the PBOC. The PBOC will
implement the reserve requirement ratio cut today, releasing liquidity of CNY700
billion. CFETS-ICAP's money-market sentiment index closed at 26 on Wednesday,
down from 28 on Tuesday.
MONEY MARKET RATES: Benchmark 7-day deposit repo average fell to 2.5146% on
Thursday from 2.5927% on Wednesday; Overnight average decreased to 2.0470% from
2.0855% on Wednesday: Wind Information.
YUAN: The yuan opened at 6.6399 against the U.S. dollar Thursday, weaker
than Wednesday's official close of 6.6211, and also weaker than today's central
parity rate of 6.6180 set by the PBOC, which itself rose dramatically from
Wednesday's 6.6595. Today's surge marks the biggest daily rise since Oct 11,
2017.
BONDS: The yield on benchmark 10-year China Government Bond was last at
3.5000%, down from the previous close of 3.5075%, according to Wind Information.
STOCKS: Shares in Shanghai continued to decline due to the low market
sentiment in response to the yuan's fluctuations and the approaching U.S.-China
tariff deadline tomorrow. Shanghai Composite Index closed 0.92% lower at
2733.88, Hong Kong's Hang Seng Index declined 0.57% to 28080.72.
FROM THE PRESS: As China's economy focuses more on high quality development
than on a high growth rate, the leverage ratio will naturally decrease, Economic
Daily reported, citing Liu Shijin, member of the Monetary Policy Committee of
the PBOC. The country's deleveraging campaign has achieved some preliminary
results as the leverage ratio stabilizes, Liu noted. The leverage structure is
also optimizing, with a lower leverage ratio for the business sector and in the
asset-liability ratio of state-owned enterprises, Liu added.
The PBOC's monetary policy this year has balanced liquidity and structural
support, both maintaining the liquidity at reasonable and sufficient levels and
leading financial resources to small and micro enterprises, said Financial News,
an official publication of the PBOC, in a commentary. The PBOC released
liquidity of CNY2.8 trillion in the first six months of 2018, far exceeding a
total of CNY1.76 trillion released in the whole of last year, the newspaper
noted. The bond market is stabilizing, while appropriate bond defaults will help
the market mature and develop healthily in the long term, the commentary said.
Consumption growth is expected to rise slightly in the second half of the
year, contributing over 60% of the overall economic growth this year, Shanghai
Securities News reported, citing Lian Ping, chief economist of Bank of
Communications. Further opening-up, an expansion in imports as well as
individual income tax reforms will have positive impacts on consumption, Lian
added. With the increase of industrial profit and a cut in manufacturing taxes,
manufacturing investment should accelerate in the second half of the year,
marking an annual growth at about 6%, Lian predicted.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: sherry.qin@marketnews.com
--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.