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MNI (London)

POLICY: China's economy is notably slower after a rapid recovery from the Covid-19 pandemic as property market concerns shake investor confidence, executives at a top construction equipment maker told MNI, adding the slump comes as manufacturers are dealing with a transition to "carbon neutral" processes and equipment by 2060.

POLICY: Hong Kong will improve offshore yuan liquidity, facilitate the circulation of yuan between offshore and onshore markets and promote RMB internationalization, said Paul Chan Mo-po, Financial Secretary of Hong Kong during the Financial Street Forum on Thursday.

POLICY: Any policy shift by the Federal Reserve is expected to have a limited impact on the yuan forex market, which will remain stable at a reasonable and balanced level, Pan Gongshen, deputy governor of the People's Bank of China, told the Annual Conference of Financial Street Forum Wednesday.

POLICY: The People's Bank of China has kept money supply reasonable and liquidity sufficient, with CPI rising moderately, PBOC Governor Yi Gang said Wednesday during the opening ceremony of the Financial Street Forum, according to a statement on the PBOC website. The growth rate of money supply and aggregate financing basically matches that of nominal GDP, said Yi. The central bank also gives full play to the guiding role of monetary and credit policy tools, supporting private and small companies, as well as promoting green and low-carbon development, Yi continued.

LIQUIDITY: The PBOC injected CNY100 billion via 7-day reverse repos with the rate unchanged at 2.2%. The operations lead to a net injection of CNY90 billion after offsetting the maturity of CNY10 billion reverse repos today, according to Wind Information. The operation aims to offset the impact of tax season and the issuance of government bonds, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.0265% from the close of 2.2097% on Wednesday, Wind Information showed. The overnight repo average decreased to 1.6721% from the previous 2.0840%.

YUAN: The currency weakened to 6.3988 against the dollar from 6.3936 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 6.3890, compared with the 6.4069 set on Wednesday, marking the lowest parity since Jun 11, 2011.

BONDS: The yield on the 10-year China Government Bond was last at 2.9925%, down from Wednesday's close of 3.0350%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.22% at 3,594.78, while the CSI300 index rose 0.36% to 4,928.02. Hang Seng Index rallied 0.45% to 26,017.53.

FROM THE PRESS: Chinese Premier Li Keqiang called for "all-out" efforts to ensure coal production and transportation for heating, and continue to crack down on market speculation, the Global Times said citing a State Council meeting. The government vowed to increase gas supply and asked local authorities to keep gas and heating prices stable, the newspaper said. Officials from the country's top planning agency inspected major coal ports, storage and distribution centers and summoned energy companies to ensure coal supply for the winter, the newspaper said. Authorities approved three new mines in Northwest China's Gansu Province on Tuesday, it said. Daily coal output on Monday has exceeded 11.6 million tons, a new high this year. The Zhengzhou Commodity Exchange limited thermal coal futures contracts to curb soaring prices, it said.

The PBOC signaled its intention to ensure rising liquidity demanded by more local government bond sales, tax remissions and large maturing MLFs, even as the probability of RRR cuts has declined, the Shanghai Securities News reported citing market participants. The central bank injected CNY100 billion on Wednesday, the first time since the end of September when it for multiple days pumped CNY100 billion to ensure inter-season funding needs, the newspaper said. While the central bank kept LPRs unchanged on Wednesday, it may still lower the lending benchmark in Q4 by as much as 0.1 pp to spur the demand of the real economy and help SMEs, the newspaper said citing analyst Wang Qing of Golden Credit Rating.The People's Bank of China will avoid risk contagion from the Evergrande Group to other developers and to the financial sector, as it is a single case and the spillover effect is generally controllable, said PBOC Governor Yi Gang during the G30 International Banking Seminar on Wednesday, according to a statement on the PBOC website. The central bank will ensure all the creditors and related parties' legal rights being treated fairly, as the PBOC is confident that it can limit the scope and avoid systemic risks, said Yi. Yi also expects rising PPI pressure to ease by the end of the year, though the figure may remain at a high level for the following months, the statement said.
MNI London Bureau | +44 203-586-2225 | les.commons@marketnews.com
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MNI London Bureau | +44 203-586-2225 | les.commons@marketnews.com
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