CHINA: Country Wrap: Credit Supply Sufficient per PBOC
Aug-14 05:29
- China has allocated 188 billion yuan ($25.9 billion) from its 2025 ultra-long special treasury bond funds to support equipment upgrades across major economic sectors, the National Development and Reform Commission (NDRC) advised. The funds will support about 8,400 projects in industry, energy equipment, power, transportation, logistics, environmental infrastructure, education, culture and tourism, healthcare, elevators in aging residential buildings, electronics, agriculture, grain and oil processing, workplace safety and recycling, leveraging more than 1 trillion yuan in total investment. (source Global Times)
- The overall credit supply is sufficient to effectively meet the financing needs of the real economy. Data released by the People's Bank of China on August 13 showed that at the end of July, the scale of social financing and the growth rate of broad money (M2) both remained at a high level, providing a suitable monetary and financial environment for the real economy and reflecting a moderately loose monetary policy orientation. Experts say that in the first half of the year, the People's Bank of China introduced a package of monetary policies, which effectively supported the recovery of the real economy. The effects of these policies will become more apparent and continue to be released, providing strong support for achieving the annual economic and social development goals and tasks. (source China Securities Journal)
- Equity markets are mixed. Hong Kong was higher earlier, but is now down a touch, while the CSI 300 is up a little over 0.50%, last close to 4200.
- Yuan Reference Rate at 7.1337 Per USD; Estimate 7.1753
- Bonds are steady with the CGB10yr at 1.73% (from yesterday's close of 1.72%)
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LOOK AHEAD: UK Timeline of Key Events (Times BST)
Jul-15 05:23
| Date | UK | Period | Event |
| 15-Jul | 2100 | Q1 | Mansion House: Chancellor Reeves and BOE Bailey |
| 16-Jul | 0700 | Q1 | Consumer inflation report |
| 17-Jul | 0700 | Q1 | Labour Market Survey |
| 22-Jul | 0700 | Q1 | Public Sector Finances |
| 23-Jul | 0001 | Q1 | Brightmine pay deals for whole economy |
| 24-Jul | 0930 | Q1 | S&P Global Flash PMI |
| 24-Jul | 1100 | Q1 | CBI Industrial Trends |
| 25-Jul | 0001 | Q1 | Gfk Monthly Consumer Confidence |
| 25-Jul | 0700 | Q1 | Retail Sales |
| 28-Jul | 1100 | Q1 | CBI Distributive Trades |
| 29-Jul | 0001 | Q1 | BRC Monthly Shop Price Index |
| 29-Jul | 0930 | Q1 | BOE Lending to Individuals M4 |
| 01-Aug | 0930 | Q1 | S&P Global/ CIPS UK Final Manufacturing PMI |
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Jul-15 05:18
| Date | Time | Country | Event |
| 15-Jul | 0800 | ES | HICP (f) |
| 15-Jul | 1000 | EU | Industrial Production |
| 15-Jul | 1000 | DE | ZEW Current Expectations Index |
| 16-Jul | 0900 | IT | HICP (f) |
| 16-Jul | 1000 | EU | Trade Balance |
| 17-Jul | 1000 | EU | HICP (f) |
| 17-Jul | ---- | EU | ECB Cipollone At G20 Meeting |
| 18-Jul | 0700 | DE | PPI |
| 18-Jul | 0900 | EU | EZ Current Account |
| 18-Jul | 1000 | EU | Construction Production |
| 18-Jul | ---- | EU | ECB Cipollone At G20 Meeting |
| 21-Jul | 1000 | EU | EZ Quarterly GDP Third Estimate |
| 22-Jul | 0900 | EU | ECB Bank Lending Survey |
| 23-Jul | 1500 | EU | Consumer Confidence Indicator (p) |
JGBS: Bear-Steeper But Off Cheapest Levels
Jul-15 05:16
JGB futures are weaker, -13 compared to settlement levels, but ranges have been narrow.
- Today, the local calendar will be empty apart from 5-year Climate Transition supply.
- Cash US tsys are little changed in today’s Asia-Pac session. Focus is on today’s June CPI inflation data and several Fed speakers ahead of Friday evening's policy blackout.
- Cash JGBs are flat to 7bps cheaper across benchmarks, with a steeper curve. The benchmark 10-year yield is 0.7bp higher at 1.589% after revisiting the cycle high of 1.596% earlier in the session.
- As Japan's upper house elections approach (held July 20), focus remains on the relentless rise in longer-dated JGB yields. The 30-year is up 1bp at 3.182% after hitting 3.219%. This is a fresh high on record (since it was debuted in 1999, per BBG). Concerns around fiscal slippage are a factor in the JGB sell-off. The 2/30yr JGB curve is at +240bps, just off multi-decade highs.
- Swap rates are ~1bp higher to 1bp lower, with a flatter curve. Swap spreads are mostly tighter.
- Tomorrow, the local calendar will be empty.
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