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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 Chinese yuan climbed to 6.4010 against the U.S. dollar
on Friday from yesterday's 6.4325 closing, following today's higher fixing.  
     PBOC set yuan central parity rate vs U.S. dollar at 6.4169, stronger than
Thursday's 6.4401. PBOC has set the fixing stronger for four trading days out of
five this week, which led to total 1.18% gain. Today's fixing was the highest
since Dec 9, 2015.
***COMMENT: MNI market sources said USD-CNY has not reached the bottom
considering the U.S dollar index continues to weaken. 
  - Forex buyers are withholding orders while holders are reluctant to sell,
both expecting a stronger yuan. 
  - The escalating volatility is causing nervous investors to withhold long-term
and significant transactions.  
     Interbank market rates diverged after PBOC injected net CNY80 billion by
open-market operation. 
  - 7-day repo average last at 2.8797%, lower than 2.9769% yesterday 
  - Overnight repo average 2.8463%, higher than 2.8021% yesterday. 
     ***COMMENT: MNI interbank market sources said liquidity is tighter given
businesses are paying for annual taxes and banks are making reserve payments. 
  - Liquidity inadequate to meet rising demand going into Feb holiday.
     Yield on 10-year China government bonds last traded 3.9600%, down from
3.9700% close yesterday: Wind Information 
The Shanghai Composite Index finish midday trading up 0.36% to 3,487.24, while
Hang Seng Index rose 0.07% to 32,143.29.
--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$]