MNI China Daily Summary: Monday, April 14

POLICY: China's exports grew 12.4% y/y to USD313.91 billion in March, higher than the 4.4% y/y consensus, according to data released by China Customs.

POLICY: China’s imports fell 6% y/y in March in yuan terms as falling international commodity prices lowered the value of inbound shipments, Lu Daliang, spokesman of the General Administration of Customs told reporters.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY43 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY50.5 billion after offsetting the maturities of CNY93.5 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.7039% from 1.6534%, Wind Information showed. The overnight repo average increased to 1.6452% from 1.6226%.

YUAN: The currency strengthened to 7.3021 against the dollar from 7.3245 on Friday. The PBOC set the dollar-yuan central parity rate higher at 7.2110, compared with 7.2087 set on Friday. The fixing was estimated at 7.3185 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6600%, unchanged from the previous close, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index gained 0.76% to 3,262.81 while the CSI300 index increased 0.23% to 3,759.14. The Hang Seng Index edged up 2.40% to 21,417.40.

FROM THE PRESS: The People’s Bank of China will likely cut the reserve requirement ratio or interest rates in a timely manner should U.S. tariff hikes cause negative impact on the economy, said Yu Yongding, a former PBOC monetary policy committee member. The PBOC will also likely increase liquidity injections via open market operations or purchase newly issued government bonds in the secondary market to support expansionary fiscal policy, said Yu. The PBOC may even need to directly intervene in the capital and property markets if volatilty triggers systemic financial and economic risks, said Yu. (Source: Shanghai Securities News)

The Chinese economy is expected to grow more than 5% in Q1, supported by accelerated recovery in consumption, with March retail sales estimated to grow an average 4.16% m/m, higher than the previous 4%, Yicai.com reported citing analysts. However, March industrial output growth was estimated to fall to 5.77% from the previous 5.9%, given external pressures and fluctuations in raw material prices, the newspaper said. The estimated growth in fixed-asset investment for the first quarter has been revised down to 4.07%, slightly lower than the 4.1% increase recorded in the first two months, the newspaper added.

Recovered corporate credit demand amid rising manufacturing PMI and accelerating infrastructure construction supported March's better-than-expected growth in new yuan loans, 21st Century Business Herald reported citing analysts. Residential housing mortgages also grew rapidly, as the transactions of new and established houses in many cities increased significantly, the newspaper said, adding that early repayment has eased following the reduction in outstanding housing mortgage rates. Banks extended CNY3.64 trillion in new loans in March, up from February's CNY1.01 trillion.