CHINA RATES: China Repo Rates Diverge On Friday
The seven-day deposit reverse repo average across China's interbank market was at 1.9697% on Friday, higher than the close of 1.7730% on Thursday, according to Wind Information. The overnight deposit reverse repo average was last at 1.4159%, lower than the previous 1.4443%.
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AUSSIE BONDS: Weaker Ahead of New Dec-34 Bond
ACGBs are trading weaker (YM -7.0 & XM -5.5) in a narrow range ahead of the pricing of the syndicated new Dec-34 bond. The AOFM announced that the initial issue will be of benchmark size with price guidance of a spread of 8.5 to 11.5bp over the implied bid yield for the 10-year bond futures contract.
- US Tsys are holding marginally cheaper in Asia-Pac trade.
- Cash ACGBs are 5-7bp cheaper with the 3/10 curve 2bp flatter and the AU-US 10-year yield differential +6 at -6bp.
- Swap rates are 3-7bp higher with the 3s10s curve 3bp flatter and 10-year EFP 1bp tighter.
- Bills strip pricing is -5 to -8 with late whites the weakest.
- RBA dated OIS is 5-7bp firmer for meetings beyond July with 22bp of cumulative tightening priced for August.
US TSYS: Holding Cheaper
Tsys are holding cheaper this morning, little meaningful macro news flow has crossed and there has been little follow through on moves thus far. This leaves cash tsys 0.5-1.5bps cheaper across the major benchmarks. TYM3 deals at 114-11+, a touch off the base of the observed 0-04 range.
CNH: CNY Fixing - At Neutral
The USD/CNY printed at 6.8731, versus a Bloomberg consensus of 6.8732.
- Today's fix is a -1pip deviation in USD/CNY terms, so at neutral. The 5-day rolling sum of the error term is at -32pips, close to unchanged versus yesterday levels.
- USD/CNH has had a slightly offered tone today, last near 6.8760, close to -0.10% for the session so far. This is line with slightly weaker USD levels against the majors.
