MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

CBI Price Expectations for Three Months Ahead Lowest Since December 2020

MNI: UK JUL CBI INDUSTRIAL TRENDS TOTAL ORDERS -32

Broad-Based IFO Weakness Reinforces Narrative of Recovery Stall

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Near Late Lows After Posting Strong Gains Post-PPI

US TSYS
  • Treasury futures trading weaker but off lows after the bell, no obvious headline or block driver for the reversal. Treasury futures had rallied after PPI came out weaker than estimate: -0.5% vs. 0.0%, weekly claims higher than expected at 239K.
  • The main takeaway is that PPI inflation has slowed more notably in the past two months, better reflecting the improvement in supply chain pressures although it hasn’t yet fully fed through to core CPI underlying goods.
  • June 10Y futures marked session high of 116-03 by midmorning, 10Y yield low of 3.3681%, before retracing through the second half to 115-12.5 low and 3.4562% high yield. Curves maintained steeper profiles, however, as short end rates kept pace with the intermediates, 2s10s currently +4.905 at -52.444.
  • Fed funds implied hike for May'23 held steady around 18.4bp, as well as Jun'23, while projected rate cuts later in the year have receded slightly from this morning's levels: Nov'23 cumulative -31.5bp to 4.511%, Dec'23 cumulative -49.5bp at 4.331. Fed Terminal currently at 5.01% in Jun'23.
  • Friday focus: Fed Speak, Import/Export prices, Retail Sales, Industrial Production, Capacity Utilization and UofM sentiment.
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