MNI China Daily Summary: Wednesday, September 4

MNI: UK AUG FINAL SERVICES PMI 53.7 (FLASH: 53.3); JUL 52.5

RPT-MNI POLICY: Fed Prefers Gradual Rates Easing If Jobs Allow

MNI: PBOC Sets Yuan Parity Higher At 7.1148 Weds; +2.17% Y/Y

MNI: PBOC Net Drains CNY276.6 Bln via OMO Wednesday

CHINA PBOC CONDUCTS CNY0.7 BLN VIA 7-DAY REVERSE REPOS WEDS

US MBA: REFIS -0.3% SA; PURCH INDEX +3% SA THRU AUG 30 WK

MNI: US MBA: MARKET COMPOSITE +1.6% SA THRU AUG 30 WK

MNI: EUROZONE JUL PPI +0.8% M/M, -2.1% Y/Y

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

UK: Week Ahead

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NZGBS: Sharply Richer After Q3 GDP Miss, US Tsy’s Post-FOMC Rally Adds To Strength

BONDS

In local morning trade, NZGBs are 9-14bps richer across benchmarks, with the 5-year leading, after Q3 GDP surprises on the downside printing -0.3% q/q (-0.6% y/y) versus expectations of +0.2% (+0.5%).

  • Swap rates are 12-16bps lower on the day, 2-8bps lower after the release of the data.
  • The strong performance from the local market has also been supported by a strong post-FOMC rally by US tsys. US tsys finished 13-30bps richer, with the curve steeper, after Fed held the funds rate steady, acknowledging inflation has eased. However, the Fed Chair Powell reiterated the Fed is "prepared to tighten policy further, if appropriate".
  • FOMC-dated OIS for March fell 8.5bps to 5.108%, back to pre-payrolls levels pricing in a cumulative 22.4bp of easing.
  • RBNZ dated OIS pricing has shunted 8-18bps softer across meetings beyond Apr’24.
  • Today, the NZ Treasury plans to sell NZ$200mn of the 4.5% May-30 bond, NZ$225mn of the 3.5% Apr-33 bond and NZ$75mn of the 2.75% May-51 bond.
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