MNI China Daily Summary: Wednesday, July 3

MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row

MNI: PBOC Sets Yuan Parity Higher At 7.1312 Weds; -0.34% Y/Y

MNI: PBOC Net Drains CNY248 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1312 WEDS VS 7.1291

Services PMI points to wage bills increasing operating expenses

MNI: UK JUNE FINAL SERVICES PMI 52.1 (FLASH: 51.2); MAY 52.9

MNI: EUROZONE JUNE FINAL SERVICES PMI 52.8 (FLASH: 52.6); MAY 53.2

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

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Under Pressure In Early Pre-BoE Trade

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Moves in wider core global FI markets weigh on gilts in early trade, with tepid demand at the latest 10-Year Tsy auction and some BoJ-related weakness for JGBs noted.

  • Futures trade through yesterday’s low but remain comfortably with the range seen week to date, last -30 at 97.65 (lows of 97.60).
  • Cash gilt yields are 2.5-3.0bp higher across the curve.
  • SONIA futures come under some very light pressure after the gilt open, last 0.25-2.5 lower through the blues.
  • Our full preview of the impending BoE decision can be found here.
  • On Wednesday we suggested that a dovish BoE outcome probably presents the greatest risk to current market pricing, although the move away from recent hawkish extremes provides a little more balance to the risk profile heading into the decision (click for more).
  • Overnight, the S&P-KPMG-REC Report on Jobs showed that the labour market continues to soften, albeit at a slower pace than in March.
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Moves in wider core global FI markets weigh on gilts in early trade, with tepid demand at the latest 10-Year Tsy auction and some BoJ-related weakness for JGBs noted.

  • Futures trade through yesterday’s low but remain comfortably with the range seen week to date, last -30 at 97.65 (lows of 97.60).
  • Cash gilt yields are 2.5-3.0bp higher across the curve.
  • SONIA futures come under some very light pressure after the gilt open, last 0.25-2.5 lower through the blues.
  • Our full preview of the impending BoE decision can be found here.
  • On Wednesday we suggested that a dovish BoE outcome probably presents the greatest risk to current market pricing, although the move away from recent hawkish extremes provides a little more balance to the risk profile heading into the decision (click for more).
  • Overnight, the S&P-KPMG-REC Report on Jobs showed that the labour market continues to soften, albeit at a slower pace than in March.