MNI China Daily Summary: Monday, July 22

MNI BRIEF: PBOC Lowers Ceiling of Its Interest Corridor

MNI: China CFETS Yuan Index Down 0.05% In Week of Jul 19

MNI: PBOC Sets Yuan Parity Higher At 7.1335 Mon; -1.18% Y/Y

MNI: PBOC Conducts CNY58.2 Bln Via OMO Mon; 7day Repo Rate Cut

MNI BRIEF: PBOC Cuts 7-Day Repo Rate By 10bp

CBRT Data Watch

NBH Data Watch

Pay concerns push back easing expectations; curve flattens

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

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Real Yields Gradually Decline

US TSYS

Tsy futures trade near late session highs, yield curves flatter with short end underperforming. Generally muted second half after whip-saw action this morning. Several underlying factors to consider

  • Tsys gap bid after headlines that WH narrowing choices over Fed Gov Brainard: "GOOLSBEE, DALY, CARPENTER ALSO UNDER SERIOUS CONSIDERATION" Bbg. Desks see less hawks in the roost as bond positive.
  • Some trading desks suggest early month-end positioning a factor, though hard to tell with massive March/June Tsy futures roll volume so far (TYH/TYM>1.3M already, TYH3 total volume >2.2M) as well as large curve flattener Block (-38,200 TUM3 102-01.62, sell through 102-03 post-time bid vs. +20,200 TYM3 111-21 post-time offer) and outright selling in 2s.
  • Rate locks and pre-auction short sets into support: corporate bond issuance returns after plying sidelines ahead morning data. Tsys pared support briefly following weak $35B 7Y note auction (91282CGO8) tails: 4.062% high yield vs. 4.047% WI; 2.49x bid-to-cover vs. 2.69x last month.
  • Risk appetite improved late as real yield recede (10Y -4.5bp to 1.46% - pre FOMC minutes levels).
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