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PBOC Brings Month-End OMO Injection To CNY 200bn


The PBOC injected a net CNY 40bn via OMO's today, the fifth day of injections heading into month-end that brings additional liquidity to CNY 200bn. The PBOC has reiterated that the injections are to ensure liquidity into month end and should not be seen as easing, the Central Bank injected a net CNY 40bn at the end of July and CNY 100bn at the end of June. The overnight repo rate rose some 38bps to 2.2087% while the 7-day repo rate fell 5bps to 2.35%. Bond futures higher for a third straight session amid some risk off sentiment in the region. 10-Year up 8 ticks at 100.175, just shy of a contract high of 100.235 hit at the start of August.

  • Meanwhile there was another article about local government special bonds in state media today. China is likely to accelerate the sales of local government special bonds and increase fiscal spending to boost the growth in H2, while reserving some quotas for use in December to help Q1 growth, the Shanghai Securities News reported citing analysts. The PBOC will moderately inject long-term funds to support infrastructure investment, especially providing precise support to SMEs, agriculture and manufacturing sectors, the newspaper said.
  • Elsewhere spreads corporate bond spreads widened after the latest escalation in China's crackdown on private industries spurred a bid in government bonds. China's top leadership called for strengthening anti-monopoly measures and further implementing fair competition policies, including increasing supervision on platform economy, technological innovation and information security.

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