CHINA RATES: China Repo Rates Rise On Friday

USD/JPY sits a touch off session lows, last printing at ¥139.20/30 down ~0.3%. Tuesdays low in the pair remain intact for now. The move in the Yen came alongside an offer in Japanese equities, the Nikkei fell ~1% before paring losses. There was no obvious headline driver for the moves, with perhaps technical flows in the Nikkei the catalyst.

• Elsewhere Tsys firmed off session lows and the Antipodeans pared some of this morning's gains.

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 May-34 supply sees the recent run of strong pricing at ACGB auctions continue with the weighted average yield printing 1.0bp through prevailing mids (per Yieldbroker). The cover ratio moved higher to 4.2714x from 3.7812x at the March auction.
• A significantly higher outright yield compared to the previous offering, a low level of issuance, and the line’s hedgability given its inclusion in the XMM3 basket all look to have contributed to today’s bidding.
• The small number of successful bidders also showed some investors were willing to pay up to access the line.
• There has been nothing in the way of notable movement in ACGB-34 cash trade and XM futures post-auction.

The USD/CNY fixing printed at 7.1196, versus a Bloomberg consensus of 7.1195.

• Today's fix represents a +1pip deviation in USD/CNY terms relative to expectations, so as expected essentially.
• USD/CNH has traded with a softer bias in the first part of trade today, the pair last around 7.1200. We have May trade data coming up.