CHINA RATES: China Repo Rates Rise On Thursday
The seven-day deposit reverse repo average across China's interbank market was at 1.7300% on Thursday, higher than the close of 1.7223% on Wednesday, according to Wind Information. The overnight deposit reverse repo average was last at 1.6660%, higher than the previous 1.6291%.
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CHINA PRESS: New Yuan Loans May Increase Month-on-month In June
China’s new yuan loans will likely reach CNY2.3 to 2.5 trillion in June, a year-on-year decrease of CNY500 to 700 billion, more than May’s CNY950 billion, amid sluggish credit demand and policymakers discouraging banks’ pursuit of large scale credit expansion, said Wang Yifeng, analyst at Everbright Securities. Aggregate finance would reach CNY3.3 to 3.5 trillion, compared to CNY2.07 trillion in the previous month, Wang predicted. M2 money supply could reach 6.8%, slowing from May’s 7% reading, said Zhou Guannan, analyst from Huachuang Securities. This week is the PBOC’s window for releasing June financial data. (Source: Securities Daily)
AUSTRALIA DATA: Consumers Concerned About Rate Hikes & Inflation
Westpac consumer confidence for July fell 1.1% to 82.7, lowest since November, after rising 1.7% in June as increased rate hike expectations and elevated inflation weighed on sentiment. Following the higher-than-expected May CPI, press commentary on rate hikes resumed extensively. Households remain relatively optimistic re the labour market though. Its strength has been a key driver in helping consumers to weather the increased cost-of-living.
- High inflation and the possibility of another increase in rates weighed on consumers in July and, this more than offset any benefit from tax cuts implemented from July 1 as it is too early for the benefit to be felt. This is also the case for energy and rent relief also dated July 1.
Source: MNI - Market News/Refinitiv
- Westpac’s mortgage rate expectations rose 12.8% in July and now almost 60% expect a rate hike in the next 12 months.
- Westpac observed a sharp fall in “family finances vs a year ago” of 8.4% m/m after rising 9.7% in June. The outlook also deteriorated too. The economic outlook improved though.
- The “time to buy a major item” rose 3.1% m/m but remains significantly below the series average.
- Unemployment expectations fell 3.3% and around the series average, signaling a steady labour market.
- The time to buy a house remains around its “extreme cycle lows” while house price expectations are elevated.
Source: MNI - Market News/Refinitiv
CNH: USD/CNY Fixing Back Close To Recent Highs, Despite Lower USD Index Levels
The USD/CNY fix printed at 7.1310, versus a Bloomberg consensus of 7.2692.
- This leaves the fixing just short of recent highs (7.1312, recorded last Wednesday). The fixing error was -1382pips in USD/CNY terms, close to yesterday's outcome.
- The result is slightly bearish in the sense that the fixing is very close to recent highs, but USD indices remain comfortably off recent highs. Versus early July highs the USD BBDXY index is around 0.80% weaker. This suggests still some comfort with modest depreciation pressures.
- USD/CNH has ticked higher post the fixing but found some selling interest above 7.2900.
