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Reporting on key macro data at the time of release.
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POLICY: China will speed up the use of new fiscal funding measures to strengthen the economic recovery and ensure the spending goes to help companies and improve people's livelihoods, the State Council said following an executive meeting on Monday. By early August, most of the planned CNY2 trillion in new fiscal funding was channeled to municipal governments, with a minor portion used to adjust for tax and fee cuts, the government said in a statement on its website.
POLICY: China's Ministry of Commerce announced a 12-month anti-dumping investigation into wine from Australia after China banned beef imports from the country and added extra tariffs to barley imports. The investigation, which may be extended for a further 6 months, is targeting wines from Australia in containers holding 2 liters or less, according to a statement published by the Ministry's Website.
LIQUIDITY: The People's Bank of China (PBOC) injected CNY100 billion via 7-day reverse repos with the rate unchanged. This resulted in a net injection of CNY50 billion due to the maturity of CNY50 billion of reverse repos today, according to Wind Information. The operation aims to offset the impact of tax season and keep liquidity reasonable and ample, the PBOC said on its website.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 2.1868% from Monday's close of 2.2092%, Wind Information showed. The overnight repo average rose to 2.1161% from 2.1058% on Monday.
YUAN: The currency strengthened to 6.9257 against the dollar from Monday's close of 6.9417. The PBOC set the dollar-yuan central parity rate lower for a fifth trading day at 6.9325, following Monday's 6.9362.
BONDS: The yield on 10-year China Government Bonds was last at 2.9750%, up from Monday's close of 2.9475% according to Wind Information.
STOCKS: The Shanghai Composite Index rose 0.36% to 3,451.09. The CSI300 index decreased 0.05% to 4,812.76. The Hong Kong's Hang Seng Index slightly gained 0.08% to 25,367.38.
FROM THE PRESS: China will likely refrain from tightening monetary policy due to external and domestic uncertainties and will continue to expand M1 and social financing at reasonable rates, according to Dong Ximiao, a researcher with Renmin University. Writing in the Economic Information Daily, Dong said China's future monetary policies should be more targeted and precise and implemented in a timely manner. Policies such as targeted RRR cuts for small and medium banks to better support small businesses, rediscount policies and monetary tools to push financial institutions to help release pressure on small businesses to repay loans are all part of the approach in future policy making, Dong wrote.
China will likely limit the scope of the digital yuan pilot release until it shows mature acceptance in areas including Shenzhen, Chengdu, Suzhou and Xiong'an, as well as the Winter Olympics in Beijing in 2022, the Securities Times said in a front-page comment. While the details of the digital currency haven't been released, the newspaper speculated that users will likely access it through an application launched by the central bank, similar to current digital payments. The biggest concern is how the digital currency may disrupt the current central bank-commercial bank structure, as registering through the PBOC's digital currency app could mean opening a bank account directly with the PBOC. This may impact the central bank's balance sheet and the effectiveness of monetary policy transmission, the newspaper said.
China's tourism market is recovering with increasing group tours, CCTV News reported on Tuesday. Hubei province, the previous epicenter of the pandemic, attracted 3.26 million tourists in nine days after introducing free-entry policy at about 400 scenic spots, CCTV said. Traffic in 101 of these scenic spots has reached or exceeded the level of the same period last year, CCTV said.