MNI China Daily Summary: Thursday, July 4

MNI BRIEF: China Has Four Months To Negotiate EU EV Agreement

RPT-MNI INTERVIEW: ISM Choppiness Not A Clear Signal For Worry

MNI: PBOC Net Drains CNY98 Bln Via OMO Thurs; Rates Unchanged

MNI: PBOC Sets Yuan Parity Lower At 7.1305 Thurs; -0.79% Y/Y

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

Factory Orders Decline as Non-EU Orders Dip

DMP survey increases probability of August cut

MNI: UK JUNE CONSTRUCTION PMI 52.2 (FCST: 54.0); MAY 54.7

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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Weak 30-year auction: Gilts hit lows of the day

GILT AUCTION RESULTS
  • The 3.75% Oct-53 gilt auction was relatively weak - with a tail of 1.5bp and the average price of the auction only just coming in a bit higher than the pre-auction mid-price (with the LAP well below).
  • This has push the price of the 30-year gilt to its low of the day on the publication of the results. It has also translated across the curve to some extent too with gilt futures also hitting their lows of the day on the results (around half of this move in futures has already been reversed but there is still some steepening of the 10s30s curve evident at the time of writing).
  • We note that there was support amongst GEMMs (and around half of investors) to reopen the 3.75% Oct-53 gilt at the additional auction on 13 December (so just two weeks away) while there is also support for a new 30-year gilt to be issued via syndication in January. So there is a lot of issuance due to come in the 30-year area over the next couple of months. This may have contributed to the weak auction.
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