CHINA: Central Bank Injects CNY97.2bn via OMO

The USD/CNY fix printed at 7.1021, versus a BBG market consensus of 7.1354. This keeps the fixing close to yesterday's 7.1007 low, while the fixing error widened to -333pips (from -227pips yesterday). Today's fixing reinforces a steady to resilient yuan backdrop. 

• USD/CNH is little changed so far today, holding under 7.1400 in latest dealings.
• Headlines crossed a short while ago from China, where it reiterated that the rare earth export controls it is putting in place are lawful and do not prevent exports (via BBG). The two countries held working level trade talks yesterday.
• This is encouraging from the standpoint that dialogue is still on-going between the two sides. From Monday US Tsy Bessent stated, "Treasury Secretary Scott Bessent said he still expects Presidents Donald Trump and Xi Jinping will meet" (via BBG). However, he added all options are on the table in response to the rare earth export controls. 

• The PBOC issued CNY91bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY 0 bn.
• Net liquidity injection CNY91bn.
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.41%, from prior close of 1.44%.
• The China overnight interbank repo rate is at 1.30%, from the prior close of 1.28%.
• The China 7-day interbank repo rate is at 1.43%, from the prior close of 1.46%.

• CHINA SETS YUAN CENTRAL PARITY AT 7.1021 TUES VS 7.1007