MOF To Auction 3 Lines Today

China's MOF will today sell 2-, 5-, 10-year upsized bonds for a total of CNY 233bn comprising CNY 45bn in both 2-, 5-year sector and CNY 43bn in 10-year. Results due after 0300GMT/1100HKT.

Previous auctions:

• 2-year: Last sold on Jan 13, the sale drew an average yield of 2.4909%, at a high yield 2.5150%, total bid/cover was 3.85 and marginal cover at the high yield was 1.31
• 5-year: Last sold on Jan 13, the sale drew an average yield of 2.8627%, at a high yield 2.8875%, total bid/cover was 4.43 and marginal cover at the high yield was 1.75
• 10-year: Last sold on Jan 20, the sale drew an average yield of 3.1385%, at a high yield 3.1587%, total bid/cover was 3.13 and marginal cover at the high yield was 1.07

• The global reflation trade has seen yields rise globally, in the 10-year sector yields are some 11bps higher in the 10-year sector compared to the previous auction. But the impression of tightening from the PBOC amid a lack of liquidity injections could negatively impact demand at the sales.
• A piece in China's Economic Information Daily this could serve to add fuel to the fire in terms of tightening speculation, there was a front page commentary that predicted China's economy will grow 8% in 2021 after posting 2.3% growth in 2020. The piece also stated steady improvement in China's economic fundamentals is creating conditions for the country to normalize its monetary policy.