MNI China Daily Summary: Tuesday, May 6

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY405 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY682 billion after offsetting the maturities of CNY1087 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.7272% from 1.7986%, Wind Information showed. The overnight repo average fell to 1.7113% from 1.7853%.

YUAN: The currency weakened to 7.2169 against the dollar from the previous 7.2632. The PBOC set the dollar-yuan central parity rate lower at 7.2008, compared with 7.2014 set on April 30, the last working day before the Labour Day holiday. The fixing was estimated at 7.2465 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6230%, up from the close of 1.6200% previously, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index rose by 1.13% to 3,316.11, while the CSI300 index was up 1.01% to 3,808.54. The Hang Seng Index gained 0.70% at 22,662.71.

FROM THE PRESS: Beijing will address global uncertainty by strengthening financial cooperation with the expanded ASEAN+3 group that adds Japan, South Korea and China to the bloc, said Finance Minister Lan Fo’an at the 28th ASEAN+3 Finance Ministers and Central Bank Governors Meeting in Milan. The group agreed to launch a new rapid financing facility under the Chiang Mai Initiative using the yuan and other freely usable currencies. (Source: Securities Times)

Local governments issued CNY3.5 trillion of bonds nationwide in the first four months of 2025, up 84% y/y, Yicai reported. Refinancing bonds accounted for CNY2 trillion, up 116% y/y, of which CNY1.6 trillion replaced hidden debt, indicating most of this year’s debt-swap quota has been utilised, Yicai noted. A total of CNY1.2 trillion in new special bonds was issued out of 2025's CNY4.4 trillion quota, with 31% towards municipal and industrial park infrastructure, while transport infrastructure, urban renewal, healthcare and land reserves were allocated 20%, 9%, 6% and 6% respectively.

Key retail and catering firms in China saw sales growth of 6.3% y/y during the May holiday season, according to data from the Ministry of Commerce. During the vacation, home appliances, automobiles and communication equipment grew 15.5%, 13.7% and 10.5%. E-commerce platforms saw smart-home product sales up 20% y/y, while monitored restaurant enterprises nationwide rose 8.7% y/y.