CHINA: PBOC Injects CNY348bn via O/N During OMO
The said Thursday late that it will conduct a 1-trillion-yuan (about 147.3 billion U.S. dollars) outright reverse repo operation on Friday to maintain ample liquidity in the banking system. The operation will have a fixed quantity and be conducted through interest-rate bidding, with winning bids determined at various price levels. It will have a tenor of six months, or 185 days, with a maturity date of Feb. 15, 2027.
The daily OMO had taken a back seat this week with four successive days of conducting zero 7-day operations, but ended the week with a sizeable addition via the use of the O/N.
This took the weekly injection to CNY250.5bn
- The PBOC Issued CN0 bn of 7-day reverse repo at 1.4% during this morning's operations.
- The PBOC issued CNY349 bn O/N reverse repo
- Total maturities today CNY1bn and CNY0bn O/N
- Net Liquidity injection CNY348bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Daily Pledged Repo DR007 Wgtd Rate's last close was 1.3917%.
- The China overnight interbank repo rate is at 1.3585%, from the prior close of 1.3660%.
- The China 7-day interbank repo rate's last close was 1.3826%
- The 2-Yr NDIRS is at 1.4025% having closed last at 1.4025%.
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GLOBAL MACRO: Container Ship Departures Signal Solid Global Trade
Bloomberg’s global container ship count showed a 10% decline between February and December and then it recovered over the subsequent three months with May 1.6% above December’s level. This suggests that non-energy merchandise trade hasn’t been adversely affected by the destabilisation and uncertainty in the Middle East and fears of the impact of higher fuel prices on global growth. CPB world trade growth has been robust over 2026 to April and that appears to have continued.
Bloomberg global container ship count
- While trade tensions have eased compared with 2025, many disputes with the US persist. For instance, Thailand has just sent a delegation to discuss issues related to labour rights and China using it to cover the origin of its goods.
- Trade tensions between the US and Europe often flair with disputes over Greenland’s sovereignty one example where President Trump throws tariff threats into the arena.
- Container ship departures from Europe’s 6 largest traders have been trending lower since mid-2023 and the June 2026 30-day average at 73 is well below the 88 average from 2023 to end-January 2025. It appears to have stabilised over mid-year.
- Recent departures from Asia for the US have been impacted by Super Typhoon Bavi which severely impacted China, Taiwan and Japan. Departures from Taiwan on the weekend almost ground to a halt. It is likely that there will be payback when conditions allow.
- While departures from Taiwan for the US were steady prior to the typhoon, they were strong in June from China, Japan and Korea.
Bloomberg global container ship count
Source: MNI - Market News/Bloomberg Finance L.P.
AUSSIE BONDS: ACGB Apr-33 Supply Goes Smoothly, With More Demand Seen
The latest round of ACGB Apr-33 supply proceeded smoothly with pricing through mids (weighted average yield was 0.63bp through prevailing mids, per Yieldbroker).
- Moreover, the auction had a cover ratio of 4.2857x, which was lower than the level of the previous auction (3.1063x).
- As highlighted in the auction preview, the outright yield was 20bps below the level of the previous auction and ~30bps below its cycle high.
- However, the 3/10 yield curve had steepened versus the previous auction, continuing its move away from the recent low, the flattest since mid-2024.
- There has been a slight cheapening in cash trading of the line after the auction result.
CHINA: PBOC Injects CNY411.5bn via OMO
The PBOC has injected liquidity for a third day this week as Repo Rates steady.
In order to increase liquidity during tax payment time, the PBOC announced it will conduct CNY1.4tn 6-month reverse repo. The operation is to maintain ample liquidity in the banking system, the Chinese central bank says in a statement
- The PBOC issued CNY426.5bn of 7-day reverse repo at 1.4% during this morning's operations.
- The PBOC issued no O/N reverse repo
- Total maturities today CNY15bn and CNY0bn O/N
- Net Liquidity injection CNY411.5bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Daily Pledged Repo DR007 Wgtd Rate is 1.4190% vs prior close of 1.4044%.
- The China overnight interbank repo rate is at 1.3733%, from the prior close of 1.3733%.
- The China 7-day interbank repo rate is at 1.400%, from the prior close of 1.4000%
- The 2-Yr NDIRS is currently at 1.4050%, from 1.4090% yesterday.
