MNI CHINA MARKETS: Yuan Stronger; Rates Lower; SH Shares Up

     BEIJING (MNI) - The Chinese yuan climbed to 6.4003 against the U.S. dollar

on Tuesday from yesterday's 6.4036 closing, following today's stronger fixing.  

     PBOC set the yuan central parity rate vs the U.S. dollar at 6.4009 on

Tuesday, stronger than Monday's 6.4112. PBOC has set the fixing stronger for

three consecutive trading days. Today's fixing marks the highest since Dec 7,

2015.

***COMMENT: Market sources said USD-CNY would continue weaken tracking a

weakening U.S dollar index. ECB's meeting on Thursday may affect the Yuan's

outlook.

     Interbank market rates fell following PBOC's open-market operation that

resulted in no net injection. 

  - 7-day repo average last at 2.7966%, lower than 2.9159% yesterday 

  - Overnight repo average 2.5721%, lower than 2.7436% yesterday. ***COMMENT:

PBOC juggles to maintain stability of liquidity ahead of China's lunar New Year

Festival. Liquidity is currently sufficient.

     Yield on 10-year China government bonds last traded 3.9425%, down from

3.9500% close yesterday: Wind Information 

The Shanghai Composite Index finish midday trading up 0.64% to 3,523.64, while

Hang Seng Index rose 1.04% to 32,731.45. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@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$]