MNI China Daily Summary: Monday, February 6

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY150 billion of operations via 7-day reverse repos with the rates unchanged at 2.00%. The operation led to a net drain of CNY373 billion after offsetting the maturity of CNY523 billion in reverse repos. A total of CNY1.24 trillion of 7-day repos will mature this week, according to the PBOC.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) edged up to 2.0039% from 1.8210% on Friday, Wind Information showed. The overnight repo average rose to 1.8124% from the previous 1.2662%.

YUAN: The currency closed at 6.7832 against the dollar at 16:30pm Beijing time from 6.7465 on Friday. The PBOC set the dollar-yuan central parity rate higher at 6.7737, compared with 6.7382 set on Friday.

BONDS: The yield on the 10-year China Government Bond was last at 2.9210%, up from Friday's close of 2.9020%.

STOCKS: The Shanghai Composite Index fell 0.76% to 3238.70, while the CSI300 index was down 1.32% to 4086.88. The Hang Seng Index was down 2.02% to 21222.16.

FROM THE PRESS: The People’s Bank of China will deliver more innovate financial products to reduce carbon emissions and support the green transition of the economy, Governor Yi Gang said on Saturday. The central bank will make efforts to lower the price of green energy and push the growth of green exchanges, which is hard but meaningful work, he said. Beijing is setting up a national green exchange serving international investors, he said, noting the PBOC's carbon emissions reduction tool, established in 2021, had provided over CNY300 billion in relending, leveraging loans from commercial banks totalling about CNY501 billion.

Both fiscal and monetary policy should focus on stabilising employment, especially in the service sector, small businesses and self-employed groups, Economic Daily said in a commentary. The employment situation is severe and challenging this year, it said, noting that GDP expansion is crucial to ensure labor market stability considering one percentage point of GDP growth would provide 2 million jobs. The authorities will enhance training to the key groups and push cooperation between eastern and western regions of the country in a bid to create new jobs and relocate labor sources, it said.

China's property market is expected to bottom out as early as the second quarter should a series of stimulus moves be implemented promptly and effectively, Securities Times reported citing analysts on Monday. Local governments have sought to support real estate by lowering mortgage rates and downpayments, which would bolster demand in first-tier and second-tier cities. But the uncertainties of the Covid situation, speculation of further declines in property prices, and concerns about the delivery of new houses will continue to curb home buying, so the recovery of the property market in most cities may take a longer time, it said.