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Monday Look Ahead, Markit PMIs, ISMs

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Atlanta Fed 3Q GDP Est 6.1%

US TSY OPTIONS

10Y Put Scale Buyer Continues

     TOP NEWS: Chinese chief trade negotiator Vice Premier Liu He spoke by phone
to Robert Lighthizer, U.S. Trade Representative and Treasury Secretary Steven
Mnuchin on Tuesday, Chinese Ministry of Commerce said in a statement on its
website. China and the U.S. reached a consensus on solving core concerns and
agreed to keep in touch to resolve the remaining issues in the Phase One deal,
the ministry said. Minister of Commerce Zhong Shan, the People's Bank of China
Governor Yi Gang and Vice Chairman Ning Jizhe of the National Development and
Reform Commission participated in the call, according to the statement, which
gave little details. 
     POLICY: Chinese local officials must not neglect their annual economic
goals but are obligated to achieve targets and fulfill given tasks, according to
a column "People's Forum" in the People's Daily penned by Zhou Renjie, a
well-known journalist at the official newspaper. "GDP alone doesn't make a hero"
doesn't mean that it should be cast aside, Zhou wrote, referring to efforts by
President Xi Jinping's government steering away from hard GDP targets in favor
of more balanced development. Economic targets are legally binding, and local
governments should overcome their tighter budget, improve business environment
for manufacturing and help build a well-off society by 2020, Zhou wrote.
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
for the fifth day, soaking CNY120 billion from the maturity of reverse repos,
according to Wind Information. The total liquidity in the banking system is
reasonable and ample, as increased fiscal spending by month-end offset the
maturity of reverse repos, PBOC said.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.5624% from 2.5252% on Monday, Wind Information
showed. The overnight repo average increased to 2.3160% from 2.2206% on Monday.
     YUAN: The yuan weakened to 7.0363 against the dollar from 7.0320 on Monday.
PBOC set the dollar-yuan central parity rate lower at 7.0344, compared with
Monday's 7.0397. This was the first day the rate had been lowered after four
days of higher fixings.
     BONDS: The yield on 10-year China Government Bonds was last at 3.1775%,
down from the close of 3.1950% on Monday, according to Wind Information.
     STOCKS: The Shanghai Composite Index edged up 0.3% to 2,907.06, helped by
the advancement of technology shares. Hong Kong's Hang Seng Index decreased
0.29% to 26,913.92.
     FROM THE PRESS: China's increased economic downturn and global financial
volatilities and risks have made it more difficult to eliminate potential
financial market risks in the short term, the PBOC said in the 2018 Financial
Stability Report posted on its website late Monday. The central bank will
further improve mechanisms for dealing with bond default, use structural
monetary policies to create a suitable development environment for the bond
market, and guide financial institutions to promote bond financing supporting
tools for private enterprises, PBOC said.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]