PBOC Refrains From Injection Again

The PBOC matched injections with maturities in today's OMOs, the third straight day of no injections, with CNY 30bn drained last week and no fresh cash injected since Feb 25. The overnight repo rate is around 14.5bps higher today, last at 1.7452%, the 7-day repo rate has come down slightly, last at 2.0173%.

• Futures are slightly lower, but Chinese fixed income has weathered the global bond rout comparatively unscathed. Standard Chartered believe that this could change, they see reasons bonds could come under pressure. "We have recently revised higher our full year China government bond issuance forecast, following the more expansionary than expected official budget and the still high local government project bond quota. We maintain our view that CGB yield curve will likely to steepen in Q2 on a rise of supply, likely further recovery of China's economy in Q2, rising PPI inflation. We maintain our forecast for 10Y CGB bond yield at 3.5% by end Q2."
• In the cash space, some buying seen in the 5-year after a strong auction, the sale was covered 4.15x, at an average yield of 3.03%.