PBOC Unconcerned Over Liquidity

The PBOC matched maturities with injections again today, the twenty first straight session of matching maturities, while the bank hasn't injected funds since February 25. Repo rates are mixed, overnight repo rate up around 4.4bps at 1.7644% while the 7-day repo rate is down 8bps at 1.9191%.

• Bond futures are lower, despite a mixed start for equity markets, declines from Friday seen accelerating. 10-year future last down 0.13 at 97.295, the lowest since March 23. There are still a few ticks to go before closing the March 24 opening gap from 97.20.
• Data earlier in the session showed Caixin Services PMI rose to 54.3 in March from 52.1 previously, this denotes the highest reading since December 2020 and the eleventh consecutive month of expansion. Service providers were very confident about the prospects for the economic recovery and getting the pandemic under control. The gauge for business expectations rose to the highest point since February 2011.
• Elsewhere, China has clashed with Japan over diplomatic relations. China's foreign minister reportedly told his Japanese counterpart to stay away from internal issues scch as Xinjiang and Hong Kong.