CHINA PRESS: PBOC Expected To Cut RRR In Q2
Analysts expect the People’s Bank of China to cut the reserve requirement ratio in Q2 to release long-term and low-cost funds as authorities may accelerate the issuance of government and policy bank bonds, the China Securities Journal reported. Additionally, the PBOC will likely reduce policy interest rates such as the medium-term lending facility (MLF) at an appropriate time, guide banks to lower deposit rates and promote the orderly decline of the benchmark loan prime rate (LPR), the newspaper said citing Dong Ximiao, chief researcher at Merchants Union Consumer Finance.
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AUSTRALIA DATA: Australia Feb Housing New Loan Commitments +1.5%
In February 2024, new loan commitments (seasonally adjusted):
- rose 1.5% for housing to $26.4b, after a fall of 0.8% in January. It was 13.3% higher compared to a year ago.
- fell 0.9% for personal fixed term loans
- rose 31.4% for business construction (a typically volatile series) and rose 2.5% in trend terms
- fell 4.7% for business purchase of property (a typically volatile series) and rose 1.3% in trend terms
US TSYS: Treasury Edge Lower And Test Support, Yields At Highs
- Jun'24 10Y have edged lower this morning, opening just below initial support at 109-08, we initially bounced off this level reaching a morning high of 109-13+ before again looking to test support, where we now trade at 109-10 down - 11 since NY closing levels.
- Looking at technical levels: Initial support lays at 109-09/09+ (Lower 1.0% 10-dma envelope/ Apr 3 Low), round number support then rests at 109-00. While to the upside resistance holds at 110-14 (20-day EMA), above here 110-25+/31+ (50-day EMA / Mar 27 high and key resistance).
- Cash Treasury yields have continued their move higher on Monday, the curve has bear-flattened with the 2Y yield +2.3bps at 4.774% back at levels from late November, while the 10Y is +2.2bp to 4.424% testing the YTD highs, while the 2y10y -0.096 at -35.196.
- Looking Ahead: slow start to the week with focus turning to CPI and March FOMC minutes on Wednesday, PPI on Thursday.
CHINA PRESS: China Construction Sector Demand For Steel Limited
China’s construction sector demand for steel will remain limited due to poor availability of funds and the pace of progress on major projects, according to Wang Guoqing, director of the Lange Steel Research Center. However, steel mills expect demand to remain resilient from robust consumption in automobile, home appliance, and shipbuilding sectors. According to Wen Gang, director of the Steel Division of the Department of Raw Materials Industry, China’s steel consumption has effectively peaked and will enter a long-term period of reduction adjustment. (Source: 21st Century Business Herald)
