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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China 7D IB repo rate has been falling to new lows this month amid rising uncertainty over economic outlook due to surging covid cases.
- 7D IB repo rate dropped below 1.30% this week after spiking to nearly 2.5% in the end of June due driven by the month-end seasonality.
- As 7D IB Repo has been historically considered as a reliable indicator of future policy moves by PBoC, money markets in China have been pricing in further easing with 7D interbank rate trading 60bp to 70bps below China 'benchmark' policy rate at 2.1% (7D reverse repo).
- The chart below shows that a significant fall in the 7D IB repo rate has usually been associated with an easing response from the PBoC and vice versa.
- Will China policymakers be able to maintain their policy rate steady at 2.1% in the coming weeks if growth expectations start to fade again as officials impose new lockdowns?
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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