CHINA PRESS: PBOC Likely To Maintain Net Injection Later This Month
The People’s Bank of China is expected to roll over CNY600 billion in six-month reverse repos set to expire later this month as well as the CNY200 billion medium-term lending facility with excessive amounts to supplement liquidity, Yicai.com reported citing analysts. The Bank’s move to roll over the maturing CNY1.1 trillion three-month outright reverse repos with the same amount on Thursday showed no urgency for it to increase liquidity before the arrival of the Spring Festival in mid-February, analysts said.
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US TSYS: Yields Lower, TYH6 Near Mid-Point of Key Tech Levels
The US 10-Yr (TYH6) had opened the Asia trading day at 112-09+ with volumes low, sitting below the 100-day EMA of 112-15 for the first time since July. TYH6 is up at 112-10+ in morning trade, at the approximate mid-point between the 100-day EMA and the bottom side resistance being the 200-day EMA of 111-29+
Cash sees yields 0.3 -0.5bps lower. The 2-Yr and 3-Yr are unchanged this morning as markets are locked in for FOMC.
- The 2-Yr is at 3.577%
- The 5-Yr is at 3.745%
- The 10-Yr is at 4.162% - 0.4bps lower
- The 30-Yr is at 4.799% - 0.4bps lower
The 10-Yr remains in the 4.00% -4.20% range that has held in recent weeks. A more hawkish outlook from the FED could see new ranges established, particularly for the 10-yr.
Tonight sees a US$75bn 6-week bill auction and a US$39bn 10-Yr auction.
CHINA: Central Bank Withdraws CNY39bn via OMO
The PBOC kicked off the week with a modest injection yesterday ahead of a light maturity profile for 7-day repos, following the withdrawal of over CNY800bn last week. However today the OMO sees a move back to modest withdrawal despite signs that repo rates are trying to move higher.
- The PBOC issued CNY117.3bn of 7-day reverse repo at 1.4% during this morning's operations.
- Today's maturities CNY156.3bn.
- Net liquidity withdraws CNY39bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.40%, from prior close of 1.44%.
- The China overnight interbank repo rate is at 1.32%, from the prior close of 1.20%.
- The China 7-day interbank repo rate is at 1.43%, from the prior close of 1.46%.
MNI: CHINA PBOC CONDUCTS CNY117.3 BLN VIA 7-DAY REVERSE REPO TUES
- CHINA PBOC CONDUCTS CNY117.3 BLN VIA 7-DAY REVERSE REPO TUES
