CHINA RATES: China Repo Rates Rise On Wednesday
The seven-day deposit reverse repo average across China's interbank market was at 1.9412% on Wednesday, higher than the close of 1.7712% on Tuesday, according to Wind Information. The overnight deposit reverse repo average was last at 1.3939%, higher than the previous 1.2233%.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CNH: CNY Fixing - Trend At Neutral
The USD/CNY fix printed at 6.8835, versus a Bloomberg consensus of 6.8843.
- Today's fix represents a -8pip deviation in USD/CNY terms, similar to Friday's outcome of -7 pips. The rolling 5-day sum of the error term though remains very close to flat after today's result (-4pips).
- USD/CNH has been slightly offered in the first part of trading, last under 6.8950, in line with some firmness from the majors against the USD, led by JPY.
BOJ: Fixed Rate Purchase Offer
The BoJ offers to buy an unlimited amount of 5- to 10-Year JGBs at a fixed rate of 0.50%.
US SWAPS: J.P.Morgan: Position For Narrower Spreads In 7-Year Sector
Late on Friday J.P.Morgan wrote “swap spreads in intermediate maturities such as the 7-Year sector are currently wide relative to fair value. Moreover, it is worth noting that bank demand for U.S. Tsys stemming from deposit growth is one of the factors in our model for benchmark swap spreads. In the current environment, characterized by YtD deposit losses and a flat outlook at best for deposits over the remainder of the year, we estimate that bank demand for U.S. Tsys has turned negative. This persistent absence of demand for U.S. Tsys from banks will likely weigh on swap spreads and bias them narrower going forward.”
- They issued the received 7-Year swap spread trading recommendation with the swap spread trading at -28.4bp.
