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Greenback Under Pressure As Aussie Extends Gains

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CHINA RATES

CHINA RATES: The PBOC matched maturities with injections again today, the fifteenth straight day of matching maturities, while the bank hasn't injected funds since February 25. The market appears sanguine about liquidity, the overnight repo rate is 24bps lower today at 1.7592%, while the 7 day repo rate has averaged 2.054% since the return from LNY, below the 2.20% prevailing rate at the PBOC.

  • Futures are under pressure as stocks rise after declining for the past three sessions. Cash yields are higher, steepening seen with 30-year supply on the docket today – results due shortly.
  • It was reported earlier China is placing sanctions on UK individuals and entities over comments of treatment of Uighur muslims in Xinjiang province, which could raise international geopolitical tensions.
  • The PBOC delivered a statement after its quarterly scheduled meeting yesterday, the banks said it would maintain appropriate and flexible policy as well as reasonable and adequate liquidity.
  • Elsewhere, the World Bank upgraded China's growth forecast. China is expected to lead the recovery of East Asian and Pacific economies this year, growth is expected at 8.1% in 2021, compared with 2.3% in 2020. The PBOC have issued a research note which sees 2021-2025 potential growth at 5%-5.7%, the NPC set the growth target at over 6%.