MNI EM China Daily Summary: Monday, April 8

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY2 billion via 7-day reverse repo on Monday, with the rates unchanged at 1.80%. The operation has led to no change to the liquidity after offsetting CNY2 billion maturity today, according to Wind Information.

ECONOMY: China saw prices for live hogs hit CNY15.37 per kg during the week ending April 5, marking the fifth consecutive week of iincreases, according to data released by the National Development Reform Commission on Monday. Pork prices, a major CPI driver in China, will rise steadily this year as government policy to reduce breeding sow population reasonably using market mechanisms to deal with excessive supply takes effect, an agricultural policy advisor recently told MNI. (See: MNI INTERVIEW: China's CPI Pork Prices To Rise In H2)

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8328% from 1.8135%, Wind Information showed. The overnight repo average decreased to 1.7208% from 1.7122%.

YUAN: The currency strengthened to 7.2337 against the dollar from previous close of 7.2356. The PBOC set the dollar-yuan central parity rate lower at 7.0947 on Monday, compared with 7.0949 set before traditional tomb sweeping day holiday.

BONDS: The yield on 10-year China Government Bonds was last at 2.3700%, down from 2.3850% at the previous close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.72% to 3,047.05 while the CSI300 decreased 0.88% to 3,536.41. The Hang Seng Index rose 0.05% to 16,732.85.

FROM THE PRESS: The People’s Bank of China will set up a CNY500 billion, re-lending programme to support the country's technological transformation and equipment renewal projects in key areas, according to a statement released on Sunday. The programme will offer loans via 21 banks to small- and medium-sized tech companies at an interest rate of 1.75%. The one-year loans can be extended twice, for up to a year each time, the statement said. (Source: PBOC Website)

China saw about 119 million domestic tourist trips made during the three-day Tomb Sweeping Day holiday, up 11.5% over the same period in 2019, data from the Ministry of Culture and Tourism showed. Domestic tourism revenue during the period totaled CNY53.95 billion, up 12.7% from the pre-pandemic level. (Source: Jiemian News)

China’s construction sector demand for steel will remain limited due to poor availability of funds and the pace of progress on major projects, according to Wang Guoqing, director of the Lange Steel Research Center. However, steel mills expect demand to remain resilient from robust consumption in automobile, home appliance, and shipbuilding sectors. According to Wen Gang, director of the Steel Division of the Department of Raw Materials Industry, China’s steel consumption has effectively peaked and will enter a long-term period of reduction adjustment. (Source: 21st Century Business Herald)