MNI China Press Digest July 26: Deposit Rates, Fiscal, PBOC

MNI: PBOC Net Injects CNY299.05 Bln via OMO Fri

MNI: PBOC Sets Yuan Parity Lower At 7.1270 Fri; -0.95% Y/Y

CHINA PBOC CONDUCTS CNY358.05 BILLION VIA 7-DAY REVERSE REPOS FRI

CHINA SETS YUAN CENTRAL PARITY AT 7.1270 FRI VS 7.1321

MNI BRIEF: Treasury's Yellen: Inflation Moving To Fed's Target

Japan Tokyo Jul Core CPI +2.2% Y/Y

MNI BRIEF: Japan July Tokyo Core CPI Rises 2.2% Vs. June's 2.1%

MNI JAPAN JULY TOKYO CORE CPI +2.2% Y/Y; JUNE +2.1%

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

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Rate Cut Hopes Kept Alive

US TSYS
  • Treasuries continued to retreat Tuesday on heavy volumes (TYM4 >1.9M) as Europe returned from extended Easter holiday weekend. Treasury curves broadly steepened: 2s10s +6.013 to -33.801 (highest since March 21) as short end rates outperformed.
  • Intermediate to long end rates held near the middle of the day's range following this morning's slightly higher than expected JOLTS job openings at 8.756m (cons 8.73m) in Feb after an downward revised 8.748m (initial 8.86m) in Jan. The ratio to unemployed fell to 1.36x, helped by the strong 0.33m rise in unemployment in Feb.
  • Fed speakers supported short end rates on the day: Cleveland Fed Mester ('24 voter but retiring in June) won't rule out a rate cut in June, while SF Fed Daly said three rate cuts in 2024 is still a "reasonable baseline".
  • In turn, projected rate cut pricing rebounded from morning lows: May 2024 steady at -6.7% w/ cumulative -1.7bp at 5.312%; June 2024 -59.7% vs -53.3% earlier w/ cumulative rate cut -16.6bp at 5.163%. July'24 cumulative at -24.6bp vs -23.6bp earlier, Sep'24 cumulative -41.9 vs. -40.0bp.
  • Wednesday Data Calendar: ADP Jobs, S&P Global US Services/Composite PMIs (final), ISM Services and multiple Fed Speakers through the session. Main focus, however, is on Friday's March employment report, current job gain estimate at +205k.
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