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EQUITIES

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FRANCE AUCTION RESULTS

E7.5bln of LT OAT

EURIBOR

EURIBOR FIX

SPAIN AUCTION RESULTS

3/5/10-year nominals and 10-year linker

BONDS

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     EXCLUSIVE: Chinese policy advisors called for a cautious monetary policy
response to the coronavirus outbreak, telling MNI that any easing should be
targeted at affected sectors and avoid reversing the People's Bank of China
(PBOC)'s current overall neutral stance.
     TRADE: China will accept importers' applications for tariff exemptions on
permitted imports from the U.S. starting March 2, according to a statement by
the Customs Tariff Commission of the State Council on its website Tuesday. The
exemption includes suspending retaliatory tariffs in response to U.S. imposed
tariffs under Section 301. China supports domestic companies' imports from the
U.S. based on demand, according to the statement.
     POLICY: Newly diagnosed patients with coronavirus across China fell below
2,000 for the first time as of Monday with less than 100 patients diagnosed
outside the epicentre Hubei province, indicating that the situation has further
improved, Mi Feng, a deputy director of Publicity Department under the National
Health Commission, said a daily press conference.
     POLICY: China's coronavirus outbreak caused particularly heavy losses to
airlines and tourism during the Lunar New Year holiday, but many state-owned
enterprises are returning to work, Ren Hongbin, deputy director of the
State-owned Assets Supervision and Administration Commission told a briefing
today.
     LIQUIDITY: The PBOC skipped open market operations, resulting in a net
drain of CNY220 billion given the same amount of reverse repos matured today,
according to Wind Information. Total liquidity in the banking system is at a
reasonable and ample level, PBOC said on its website.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.2073% from 2.1094% on Monday, Wind Information
showed. The overnight repo average increased to 1.4959% from 1.4177% on Monday.
     YUAN: The yuan weakened to 7.0052 against the dollar from 6.9807 on Monday,
on concerns about the economic impact of the coronavirus, along with the rising
dollar index. PBOC set the dollar-yuan central parity rate higher at 6.9826,
compared with 6.9795 on Monday.
     BONDS: The yield on 10-year China Government Bonds was last at 2.8925%,
down from the close of 2.9150% on Monday, according to Wind Information.
     STOCKS: The Shanghai Composite Index gained 0.05% to 2,984.97. Hong Kong's
Hang Seng Index lost 1.54% to 27,530.20.
     FROM THE PRESS: The PBOC is unlikely to loosen monetary policy given rising
inflation, but may use structural tools such as targeted reserve requirement
ratio cuts and refinancing to help the real economy in areas impacted by the
coronavirus epidemic, the Securities Times said in a front-page commentary.
Short-term liquidity recently injected by the PBOC aims to smooth volatilities
temporarily, but the main goal should be serving the real economy, the
commentary said.
     Lowering the benchmark interest rate for deposits will be effective in
cutting costs for commercial banks even as the central bank lowered rates in the
money market, the China Securities Journal reported citing analysis from Citic
Securities. Lowering the benchmark deposit interest rate could also boost
consumption and maintain positive rate spreads between deposits and loans, the
newspaper said citing Mingsheng Securities.
     Local governments should strengthen epidemic controls and promote an
orderly resumption of work and production, according to a statement on the
government website citing the meeting of the Central Leading Group for
Coronavirus. Local authorities should develop plans to help migrant workers
return to work safely, according to the statement.
     The PBOC denied a report that it plans to loosen quotas on property-related
loans in its quarterly macro prudential assessment, according to China
Securities Journal late Monday. The central bank will insist that "houses are
for living in not speculating on," and will adjust controls on property
financing in accordance with local conditions and in order to maintain a stable,
healthy market, China Securities Journal said, citing the PBOC.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]