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BOND SUMMARY

EGB/Gilt - Attention turns to the FOMC

EMERGING MARKETS

CZKPLN Approaching Key Resistance at 0.18

US TSY OPTIONS

Range in Underlying Spurring Vol Sales

USD

Extends gains against the Pound and EUR

     BEIJING (MNI) - The yuan rose to 6.4294 against the U.S. dollar from
Monday's closing at 6.4417, following a higher fixing by PBOC today.  
     The PBOC set central parity rate at 6.4372 vs the dollar, up from Monday's
6.4574. Today's fixing was the highest since Dec 2015.
***COMMENT: MNI market sources said the sharp rally of the yuan isn't
sustainable; traders that are long on the yuan are growing weary; U.S. dollar
holders are postponing settlements against the yuan on view that the dollar will
rebound. 
***POV: Dollar-yuan volatility to rise as PBOC seeks to liberalize the exchange
rate; traders are bullish on the yuan in the near term given China's higher
returns vs the U.S. assets and resilient growth data.
     Rates fell in the interbank market after the PBOC injected net CNY270
billion by open-market operation. 
- 7-day repo average last at 2.8603%, lower than 2.8644% yesterday 
- Overnight repo average 2.7503%, lower than 2.8021% yesterday. 
     Yield on 10-year China government bonds last traded 3.9500%, down from
3.9600% close yesterday: Wind data 
     Shares rose in Shanghai, led by property companies. 
- Shanghai Composite Index finished morning trading at 3,420.80, up 0.30%
- Hang Seng Index gained 1.11% to 30,686.62.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,M$$FI$,MN$FI$,MN$FX$]