CHINA: Muted Initial Market Reaction To LGFV Debt Relief Headlines

Headlines have crossed from Bloomberg that China's Ministry of Finance will help shift $139bn of debt (or around 1 trillion yuan) from LGFV to provinces. Provincial level government will raise these funds through debt sales to repay debt of LGFVs. The initial market reaction has been positive, but not large. Bloomberg notes this is a smaller than a similar scheme, which was launched in 2015, while it is also well below total LGFV debt estimates compiled by the IMF.

• USD/CNH sits back sub 7.2400 (last near 7.2380), but hasn't made fresh lows for the session. The HSI is recovering losses, but still remains down for the session (last ~0.60%) as we head towards the lunch time break.
• Mainland equities are also off lows but remain in negative territory for the session.