MNI China Daily Summary: Thursday, Aug 22

MNI: PBOC Sets Yuan Parity Lower At 7.1228 Thurs; +2.24% Y/Y

MNI: PBOC Net Drains CNY218.4 Bln via OMO Thursday

CHINA PBOC CONDUCTS CNY359.3 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1228 THURS VS 7.1307

MNI BRIEF: BOK Holds Rate, Downgrades GDP, CPI View

MNI: UK AUG CBI INDUSTRIAL TRENDS TOTAL ORDERS -22

MNI: UK AUG FLASH MANUF PMI 52.5 (FCST 52.2); JUL 52.1

MNI: EUROZONE AUG FLASH MANUF PMI 45.6 (FCST 45.8); JUL 45.8

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

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Ylds Lower Ahead FOMC, Bond Sale Stops Through, Core CPI Accelerates

US TSYS
  • Currently, March'24 30Y futures trading at 119-15 (+15) -- still off this morning's post-CPI high of 120-09; March'24 10Y futures +7.5 at 110-18 vs 110-31.5 high. Initial technical resistance of 111-09+ (High Dec 7 and bull trigger) still intact.
  • Curves holding flatter profiles (2Y10Y -4.955 at -52.848) with bonds outperforming since the $21B 30Y reopen sale stopped .3bp through: 4.344% vs. 4.347% WI.
  • Trading desks had reported leveraged$ selling of CT30, real$ accounts selling off-the-run 30s into the post data rally, while unwinds of pre-auction short sets contributing to the post-auction bounce.
  • Focus turns to Wednesday morning's PPI: MoM (-0.5%, 0.0%), YoY (1.3%, 1.0%), and of course the FOMC rate annc and SEP at 1300ET followed by Chairman Powell's presser at 1430ET.
  • The Fed will likely lower its median "dot plot" estimate for policy interest rates at the end of 2024 to around 4.9%, former officials and staffers told MNI, as expectations build for the first rate cut to come as early as the first half of the year.
  • "My expectation is that the median will probably show two 25-basis-point cuts next year," said ex-Boston Fed chief Eric Rosengren, whose own forecast is for two to three cuts starting as early as the second quarter.
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