MNI China Daily Summary: Wednesday, July 24

MNI: PBOC Net Drains CNY203.9 Bln Via OMO Wednesday

MNI: PBOC Sets Yuan Parity Higher At 7.1358 Weds; -0.98% Y/Y

CHINA PBOC CONDUCTS CNY66.1 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1358 WEDS VS 7.1334

MNI BRIEF: China Wants U.S. Firms To Deepen Investment

MNI: US MBA: MARKET COMPOSITE -2.2% SA THRU JUL 19 WK

US MBA: REFIS +0.3% SA; PURCH INDEX -4% SA THRU JULY 19 WK

Market round-up post PMIs

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

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Solid Demand Seen At 2-year JGB Auction

JGBS

2-year supply sees solid demand as the low price comes above dealer expectations (which stood at 100.115, per the BBG poll). The cover ratio at 3.769x ticked up versus 3.705x at last month’s auction.

  • The recent richening in the outright and flattening of the 2/5 curve failed to have a significant impact on demand given the higher cover ratio and reduced tail. That said, the previous was conducted in the shadow of BoJ's April policy meeting, as flagged in our auction preview.
  • Today's outcome comes after the successful absorption of 5-year supply in mid-May. Market participants have started considering the potential adjustments to the BoJ's YCC in the upcoming months, which had shifted some attention towards the 5-year sector. However, this shift in focus didn’t appear to have a material impact on the demand observed at today's auction.
  • The 2-year JGB is slightly richer in post-auction trade, with a small uptick in JGB futures in early afternoon trade.
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