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E-MINI S&P (U1): Northbound

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The following lists highlights from Chinese press reports on Thursday:

  • China said authorities must continue to keep the yuan exchange rate "basically stable" at a reasonable and balanced level, according to a statement on following a State Council meeting on Tuesday chaired by Premier Li Keqiang. Officials must further open up the financial sector to foreign capital using the system based on the "negative list, " optimize the entry barriers for foreign banks and insurance companies and enhance the cross-border rules on the dealings between the parent company and its subsidiary, according to the statement. The council also urged to help boost trade by reducing processing time for imports and exports and lowering port fees, the statement read.
  • China's decision to experiment with the free convertibility of the yuan in Shanghai should focus on increasing the willingness to use the yuan by foreign companies and investors, Caixin reported citing industry insiders. Policies will actively encourage yuan settlement in commodity trading, facilitate the return of yuan held by foreign investors to invest in stock and bond markets in Shanghai, Caixin said citing an unnamed source from the Shanghai FX management department. It is also expected that more Qualified Foreign Limited Partners (QFLP) and Qualified Domestic Limited Partners (QDLP) pilot businesses can be implemented in Shanghai, including promoting the management of domestic yuan funds by QFLP institutions, Caixin cited sources as saying.
  • China's digital currency may gradually expand to be used in M1 and M2 in the future, which can help promote the internationalization of yuan, even as the current trials are limited to M0, Zhang Ming, deputy director of the Institute of Finance and Banking under the Chinese Academy of Social Sciences wrote in a blog post. China should also consider integrating the supply of domestic green financial products with yuan internationalization, as foreign institutional investors seeking ESG (Environmental, Social and Corporate Governance) investment may have a strong demand for green financial products in China, wrote Zhang.