China To Focus On Increasing Income Next Year
Beijing should issue consumer coupons and fiscal subsidies to increase residents’ income and property earnings, expanding employment, and promoting the private economy, Yicai.com reported, citing Teng Tai, president at the Wanbo New Economic Research Institute. China can address youth unemployment through rural revitalisation and Chinese companies’ overseas expansion and digital transformation of traditional industries, the newspaper said, citing Zhang Chenggang, professor at Capital University of Economics and Business.
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JGBS: Cash Bond Bull Flattener, Yesterday’s Remarks From BOJ Gov. Supportive
In Tokyo morning trade, JGB futures are stronger, +10 compared to settlement levels, after extending the modest gains seen overnight.
- Today, the local calendar is empty apart from 1-year supply.
- Cash US tsys are little changed in today’s Asia-Pac session after yesterday’s modest gains. On tap for today in the US: Building Permits, Housing Starts and KC Fed Schmid speaks on the economic outlook.
- Hopes that the BOJ may skip a rate hike in December have supported the JGB market after yesterday’s remarks from Governor Ueda.
- Cash JGBs are 1-3bps richer across benchmarks, with a flattening bias. The benchmark 10-year yield is 1.6bps lower at 1.066% versus the cycle high of 1.108%.
- The swap curve has twist-steepened, pivoting at the 20-year, with rates 2bps lower to 2bps higher. Swap spreads are tighter out to the 7-year and wider beyond.
CNH: USD/CNY Fixing Error Widens A Touch
- The USD/CNY fix printed at 7.1911, against a BBG consensus of 7.2326.
- Today's fix leaves the USD/CNY fixing error at -415pips. We were at -319pips on Monday, so a touch wider, although still tighter than friday's print of -479pips.
- The actual fixing sits away from the 7.2000 for now.
- USD/CNH is weaken heading into the close overnight, as the USD traded broadly weaker. The pair has edge up slightly this morning however still trades near the overnight lows, and towards the bottom of the weekly ranges, with 7.2300 activing as key support for the moment.
CHINA: Central Bank Liquidity Injection Continues.
- PBOC issued CNY288.3bn of 7-day reverse repo at 1.5%.
- Today’s maturities CNY125.5bn.
- Net liquidity injection CNY162.8bn.
- The PBOC controls and maintains liquidity within the interbank system via the issuance of reverse repo.
Following the volatility experienced around the period of the US election, the Central Bank has continued to add liquidity into the system.
