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Unexpected Issuance Pick-Up


France Sells E5.909bn of BTFs Vs E4.4-6.0bn Target


Early Put Load-Up


(X1) Pulls Away From Recent Highs

     POLICY: The People's Bank of China (PBOC) auctioned CNY10 billion 3-month
bills and CNY10 billion 1-month bills in Hong Kong today, bearing coupon rates
of 2.45% and 2.8% respectively, the central bank said on its website. The sales
were to improve the yield curve of Hong Kong's yuan bonds and promote the
internationalization of the yuan, the PBOC said.
     TRADE: President Xi Jinping is set to meet key members of the US trade
delegation, including Trade Representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin, in Beijing on Friday, the South China Morning Post
reported citing anonymous sources.
     LIQUIDITY: The PBOC skipped open market operations (OMO) for a third day,
resulting in a net drain of CNY270 billion as that amount of reverse repos
matured, according to Wind Information. There is also a CNY383.5 billion
medium-term lending facility(MLF) maturity, Wind said. The PBOC said the total
liquidity in the banking system is currently at a relatively high level, enough
to offset the maturing of MLF and reverse repos.
     RATE: The 7-day weighted average interbank repo average rate for depository
institutions (DR007) decreased to 2.2080% from Tuesday's close of 2.4112%, Wind
Information showed. The overnight repo average decreased to 1.6964% from
Tuesday's 1.9851%.
     YUAN: The yuan appreciated to 6.7596 against the U.S. dollar from Tuesday's
close of 6.7810. The PBOC set the dollar-yuan central parity rate at 6.7675
today, stronger than the 6.7765 set on Tuesday.
     BONDS: The yield on the benchmark 10-year China Government Bond was last at
3.09%, flat from the close of Tuesday, according to brokers.
     STOCKS: The benchmark Shanghai Composite Index rose 1.84% to 2,721.07. Hong
Kong's Hang Seng Index climbed 1.16% to 28,497.59.
     FROM THE PRESS: China should actively promote major fiscal and taxation
reforms and reforms in finance, state-owned enterprises, electricity, oil and
gas industry, and the science and technology sector, Vice Premier Han Zheng told
officials at the National Development and Reform Commission on Tuesday,
according to a readout on the State Council's website. Han also emphasized the
necessity to strengthen the labor market and ensure employment.
     Foreign employees of domestically listed companies can participate in
A-share equity incentive schemes, using either funds earned in China or
transferred in from overseas, according to the State Administration of Foreign
Exchange (SAFE) and the PBOC. Foreign workers can now directly process
cross-border payments and fund transfers at banks without applying for a prior
approval if they have a registration certificate, according to SAFE.
     China can boost bond issuances or cut taxes and fees further if necessary,
the Economic Information Daily said citing a report published by Chinese Academy
of Social Sciences. In total, CNY2.6112 trillion local government bond quotas
were unused through end-2018, accounting for 14.1% of the total issuance, the
newspaper said citing the report.
--MNI Beijing Bureau; +86 10 8532 5998; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]