CHINA RATES: China Repo Rates Diverge On Friday
The seven-day deposit reverse repo average across China's interbank market was at 1.8696% on Friday, higher than the close of 1.8201% on Thursday, according to Wind Information. The overnight deposit reverse repo average was last at 1.5511%, lower than the previous 1.5543.
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US TSYS: Pressure Marginally Extends
Tsys have marginally extended losses in recent dealing, this comes alongside the greenback ticking marginally higher. This leaves cash tsys 1-2bps cheaper across the major benchmarks. TYU3 deals at 113-07+, -0-02+, at the base of the 0-04+ range.
AUSSIE BONDS: ACGB Dec-34 Supply Goes Well
Expectations of sustained strong pricing at auctions proved accurate, as the possible negative factors mentioned in our auction preview did not significantly hamper the overall strength of bidding.
- The latest round of ACGB Dec-34 supply sees the recent run of strong pricing at ACGB auctions continue with the weighted average yield printing 1.03bp through prevailing mids (per Yieldbroker). The cover ratio moved higher to 3.8186x from 3.6250x at the May auction.
- Today's bidding was likely influenced by several factors, including a substantially higher outright yield compared to the previous offering, a low level of issuance, and the line's hedgability as it is included in the XMM3 basket. These factors collectively contributed to the strong bidding seen today.
- The small number of successful bidders also showed some investors were willing to pay up to access the line.
- There has been no significant movement observed in the ACGB-34 cash trade and XM futures following the auction.
CNH: CNY Fixing - Slightly Weaker, But Still Close To Neutral
The USD/CNY fix printed at 7.1795, versus a Bloomberg consensus of 7.1774.
- Today's fix represents a +21pip surprise in USD/CNY terms. This largely reverses the -32pip surprise we saw yesterday. The 5-day rolling sum of the fixing error is back to -25pips (form -45pips yesterday).
- USD/CNH has been probing fresh cyclical highs in the first part of trade today, as broader USD sentiment is slightly positive. The fixing result shouldn't stand in the way of fresh USD/CNH gains (the pair in the 7.1920/30 region at the time of writing).
