Repo Rates Rise

The PBOC matched maturities with injections again today, the eighteenth straight day of matching maturities, while the bank hasn't injected funds since February 25. Repo rates have risen heading into month and quarter end. Overnight repo rate up 51bps at 2.1097%, while the 7-day repo rate has come off highs and is last at 2.2285%, above the 2.20% offered by the PBOC. The PBOC earlier said it would ensure adequate liquidity though April.

• Bond futures are essentially flat, still buoyed by the news yesterday of inclusion on the FTSE Russel WGBI, supported by the prospect of $3.6bn inflows a month.
• Official manufacturing PMI rose to 51.9 in March, above estimates for 51.2 and up from 50.6 previously; non-manufacturing PMI demonstrated some real pick up, March printed 56.3, well above 52.0 expected and up from 51.4 in February. Composite PMI rose to 56.3 from 51.6, denoting the highest reading since November 2020. The non-manufacturing sector likely benefitted from the relaxation of some of virus-containment measures, including travel curbs, virus testing requirements and capacity limits for entertainment venues.
• Elsewhere, in a sign geopolitical tensions will continues to simmer the US State Department accused China of crimes against humanity and reaffirmed a decision to label China's treatment of minority Uyghurs in Xinjiang genocide. US Secretary of State Blinken the US was considering what the consequences for violators of human rights would be, citing economic sanctions and visa restrictions against Chinese officials as an example and encouraging allies to do the same.