CHINA: NPC Announcements in Line, Yields to Reset Recent Ranges
- A reduction in the GDP target to 4.5 -5.0% and confirmation of the CNY4.4tn of new special local government bonds and CNY1.3tn of ultra long special sovereign bonds did little to impact the China bond markets Thursday.
- China bond futures are modestly lower today whilst the 10-Yr CGB consolidates below 1.80% at 1.79%
- The reduction in growth from 'around 5%' in 2025 to 4.5-5.0% in 2026 is consistent with the messages from authorities over recent months, and represents a consistent outlook for policy.
- Expectations are growing for a RRR cut of 50bps which would release up to CNY1tn of liquidity into the system, helping absorb the new issuance.
- In 2026 it is estimated that approximately CNY50tn of higher yielding CDs are maturing for banks, which will ultimately lower their cost of funding and make government bond investments more attractive. Coupled with this is the planned 'seed money' from the Ministry of Finance to help banks boost Tier 1 capital and support balance sheets.
- This suggests a stronger demand profile from banks in the year ahead for bonds and could see the 10-Yr reset it's range to 1.70-1.80%. The 10-Yr has traded in a 1.80 - 1.90% range since September 2025.
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MNI EXCLUSIVE: Local Analysts On China's Electricity Demand Outlook
STIR: OIS Firmer Ahead Of RBA Policy Decision
Ahead of today’s RBA Policy Decision, a 25bp hike tomorrow is priced at a 75% probability, with a cumulative tightening probability of 164% by June and 235% by December 2026.
Figure 1: RBA-Dated OIS – Current Vs Yesterday
Source: Bloomberg Finance LP / MNI
CRYPTO: Bitcoin - Finds Good Demand Around $75k On First Attempt
Bitcoin had a range overnight of $76,249.31 - $79,284.59, Asia is currently trading around $77800, -0.90%. Bitcoin found some solid demand around the $75k support area and there has been no signs of any forced selling by Treasury companies as of yet which would have been a concern. The price action though still does not look great, we could still see another test of the very important $68-75k area. If it was not for the possible enforced forced selling that might come from some of these treasury Bitcoin companies I might be tempted to start dipping into a long. But for now it remains in a Bear trend and a break back below $68-$75k could signal a deeper pullback to the $50-$60 area.
- Micro2Macr0 on X: “Support for Bitcoin looks VERY STRONG within the $69,000-$70,000 area, due to it being the previous high of the last cycle and with larger volumes kicking in around this range. I get that A LOT of people want to call for the death of Bitcoin and that we're just going to keep falling from here, but the weekly RSI is at levels it's only been at 3 other times since the 2015 low 10 YEARS AGO!”
- Raoul Pal on X: “No, the ISM is not everything and it doesn't mean up only yet necessarily, but it IS a necessary condition for strong crypto prices over time (as is liquidity). Liquidity will rise faster soon too, which creates reflexivity. Economy gud, crypto gud.”
- Bitcoin’s Average True Range(ATR) for the last 10 Trading days: $3,525
Fig 1: Bitcoin spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
