CHINA: Industrial Profits Moderate, Trade War Impacts Remain
- Unsurprisingly Industrial Profits in China slipped in October with the YoY number negative and the YTD result below September.
- Industrial output had lifted in September ahead of the planned Xi Trump meeting as producers increased output. Industrial Production then moderated in the October release.
- The August and September Industrial Profit results saw profit growth both in excess of 20%, the best consecutive month result since mid-2021.
- Industrial profit releases tend to be volatile and with the added layer of trade war uncertainty the decline of -5.5% looks at this stage like a correction rather than a change in direction and any changes to monetary policy will likely remain on hold until the new year.
- Year to data moderated to +1.9% from +3.2%, ahead of the negative three year average.
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CHINA PRESS: Industrial Profits Recovered Faster In September
Industrial enterprise profits increased by 21.6% y/y in September, accelerating by 1.2 percentage points from August, amid policy support and market-demand recovery, Securities Daily reported citing data by the National Bureau of Statistics. Companies’ operating income profit margins were 5.49%, a year-on-year rise of 0.85 percentage points, increasing for two consecutive months, the newspaper said. Among the 41 major industrial sectors, profits increased in 30 industries, accounting for 73.2% of the total, the newspaper added.
CHINA PRESS: CSRC To Increase Protection of Smaller Investors
The China Securities Regulatory Commission issued 23 measures to strengthen the protection of small and medium-sized investors on Monday, aiming to create a fair-trading institutional environment, Shanghai Securities News reported. Measures include strengthening monitoring of abnormal stock trading of listed companies at risk of delisting to prevent irrational speculation and urging those that have voluntarily delisted to provide protective measures such as cash options. Authorities will also promote the People's Court to increase the application of special representative litigation in securities disputes, the newspaper said.
CHINA: Central Bank Injects CNY148.3bn via OMO
Ahead of a period of sizeable maturities, the PBOC issued it's largest sale of 7-day reverse repo in some time, getting ahead of upcoming maturities and continuing to keep liquidity well contained.
The CFETs 7-day weighted average index had begun to drift higher yesterday, in advance of the upcoming maturities, resulting in the increase sales during the open market operations.
Money market rates have spiked also with the O/N interbank repo rate at its highest in several months.
- The PBOC issued CNY475.3bn of 7-day reverse repo at 1.4% during this morning's operations.
- Today's maturities CNY159.5bn.
- Net liquidity injection CNY315.8 bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.40%, from prior close of 1.58%, the highest since last September.
- The China overnight interbank repo rate is at 1.48%, from the prior close of 1.30%.
- The China 7-day interbank repo rate is at 1.40%, from the prior close of 1.50%.
