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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.
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Free AccessMNI China Daily Summary: Thursday, August 18
POLICY: China’s benchmark Loan Prime Rate (LPR) is likely to be pushed lower next Monday following the People’s Bank of China (PBOC)’s surprise cut to key policy rates on Aug. 15, as it seeks to boost credit demand and reverse the slowing post-lockdown economic recovery, according to analysts.
POLICY: Beijing will pay close attention to the U.S. implementation of the Chip and Science Act recently signed by President Joe Biden and take any necessary measures to safeguard China's legitimate rights and interests, said Shu Jueting, spokeswoman for the Ministry of Commerce at a briefing.
LIQUIDITY: The PBOC injected CNY2 billion via 7-day reverse repos with the rate unchanged at 2.0%. This keeps the liquidity unchanged after offsetting the maturity of CNY2 billion repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.4193% from 1.4146% on Wednesday, Wind Information showed. The overnight repo average rose to 1.1885% from the previous 1.1426%.
YUAN: The currency weakened to 6.7925 against the dollar from 6.7757 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 6.7802, compared with 6.7863 set on Wednesday.
BONDS: The yield on 10-year China Government Bond was last at 2.6130%, down from the previous close of 2.6225%, according to Wind Information.
STOCKS: The Shanghai Composite Index edged down 0.46% to 3,277.54, while the CSI300 index edged down 0.87% to 4,180.10. Hang Seng Index fell 0.80% to 19,763.91.
FROM THE PRESS: The Chinese yuan is under short-term depreciation pressure, against a backdrop of unusually loose domestic liquidity, weakening Chinese economic data and as the U.S. dollar index remains at a high level, Yicai.com reported, citing an unnamed trader at a state-owned bank. The direction of the yuan will mainly be dependent on trade balance gyrations, and the currency may continue to trade sideways around current levels if exports can maintain their strong trend, the newspaper wrote, citing analysts. The yuan weakened after the PBOC’s surprise rate cut earlier this week, although it has moved away from post-cut lows, when measured against the U.S. dollar, the newspaper noted.
Local governments in China may use some of their remaining special bond quota in H2 to help boost infrastructure investment, as there is room for the issuance of over CNY1 trillion special bonds, the China Securities Journal reported, citing analysts. As of June, the level of outstanding local government special bonds nationwide stood at CNY20.26 trillion, compared to the government-set limit of CNY21.82 trillion, leaving room for ~CNY1.55 trillion of new special bonds to be issued, data compiled by the Ministry of Finance showed. Any such funds will still be mainly invested in infrastructure construction, after over 60% of the proceeds from special bonds issued in H1 went to infrastructure projects, the newspaper said, citing analysts.To read the full story
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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.