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Updated Barclays/Bbg Extension Estimates for US


Late Session Selling


Consolidation Mode


MNI Interview: St Louis Fed Economist


Rates on hold at 1.75%

     DATA: China's forex reserves rose by USD12.3 billion to USD3.1079 trillion
in Dec 2019 from USD3.0956 trillion in November, the State Administration of
Foreign Exchange (SAFE) said on Tuesday. The "small-scale" increase was due to
exchange rate conversions and asset price changes, it said. The value of the
reserves was 1.1% higher than at the beginning of this year, according to SAFE
data. The yuan gained 0.85% against the U.S. dollar through December, Wind data
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market
operations, leaving liquidity unchanged as no reverse repos mature today,
according to Wind Information. Total liquidity in the banking system is
relatively high, PBOC said.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.0408% from 1.8516% on Monday, Wind Information
showed. The overnight repo average increased to 1.2119% from 0.9986% on Monday.
     YUAN: The yuan strengthened to 6.9376 against the dollar from 6.9745 on
Monday, the highest since August. PBOC set the dollar-yuan central parity rate
lower at 6.9690, compared with last Monday's 6.9718.
     BONDS: The yield on 10-year China Government Bonds was last at 3.1625%, up
from the close of 3.1575% on Monday, according to Wind Information.
     STOCKS: The Shanghai Composite Index gained 0.69% to 3,104.80. Hong Kong's
Hang Seng Index increased 0.34% to 28,322.06.
     FROM THE PRESS: China and the U.S. shouldn't rush to sign the phase one
trade deal as some details were yet to be finalised, the Global Times said in an
editorial late Monday. While the U.S. has disclosed information on Chinese
purchases of U.S. products as well as the date and location of the deal signing,
these details haven't been confirmed by Chinese officials, the newspaper said.
Both sides should focus on finalizing the agreement and committing to its
implementation, the newspaper said.
     China won't change its agricultural import quotas to accommodate its
commitment of increasing grain purchases from the U.S., Caixin reported citing
Han Jun, a Vice Minister of Agriculture and Rural Affairs. China maintains corn
import quotas at 7.2 million tons for 2020 with 60% kept for state-owned
enterprises (SOE), while 90% of the 9.64 million tons wheat for 2020 is also
reserved for SOEs.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]