MNI EXCLUSIVE: EU Business Leader On Potential To Restart Trade Talks With China

• The PBOC issued CNY104.5 bn of 7-day reverse repo at 1.5% during this morning’s operation.
• Today’s maturities CNY118.9bn
• Net liquidity withdrawal CNY14.4bn.
• The PBOC monitors and maintains liquidity through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted Average is at 1.51%, from 1.71% yesterday.
• The China Overnight interbank repo rate is at 1.70%, from 1.70% yesterday.
• The China 7-day interbank repo rate is at 1.52%, from 1.71% yesterday. 

Expectations of strong pricing at auctions were confirmed, with the latest ACGB Dec-34 supply achieving a weighted average yield that printed 0.37bp through prevailing mids (per Yieldbroker). The cover ratio also improved, rising to 3.9900x from 3.7250x.

• As highlighted in our auction preview, several factors were likely to impact demand. While the current outright yield was around 20bps lower than the level at the previous auction, the 3/10 yield curve was at its steepest since December 2021.
• Demand for duration was also likely to benefit from the recent rebound in sentiment toward longer-dated global bonds, following last week’s sharp sell-off.
• The ACGB Dec-34 cash line and the XM futures contract are little changed in post-auction dealings. 

• CHINA PBOC CONDUCTS CNY104.5 BLN VIA 7-DAY REVERSE REPO WEDS