EM ASIA CREDIT: Shandong Gold (SHAGOL, NR) new $ mandate

• The PBOC issued CNY43bn of 7-day reverse repo at 1.5% during this morning’s OMO.
• Maturities today CNY93.5bn
• Net liquidity withdrawal CNY50.5bn.
• The PBOC monitors and maintains liquidity in the interbank market through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted Average is at 1.54%,from 1.65% Friday.
• The China overnight interbank repo rate is 1.65%, from 1.58% Friday.
• The China 7-day interbank repo rate is 1.72%, from 1.65% Friday. 

The USD/CNY fix printed at 7.2110, versus a BBG market consensus of 7.3185. 

• This is modestly above Friday's 7.2087 fixing outcome. Still, today's fixing is the highest since Sep 2023. The fixing error didn't shift much, printing at -1075pips (Friday's was -980pips)
• USD/CNH has risen post the fixing. The pair last tracking towards 7.3050, up around 0.25%. Earlier lows, were at 7.2776. 

In Tokyo morning trade, JGB futures are slightly weaker, -5 compared to settlement levels, after reversing early gains. 

• “Japan is gearing up for trade negotiations with the United States that will likely touch on the thorny topic of currency policy, with some officials privately bracing for Washington to call on Tokyo to prop up the yen.” (per RTRS)
• “Prime Minister Shigeru Ishiba on Friday set up a task force to oversee trade negotiations with the United States, headed by his close aide and Economy Minister Ryosei Akazawa, who domestic media said will visit Washington next week.”
• Cash US tsys are flat to 3bps richer, with a steepening bias, in today’s Asia-Pac session after Friday’s heavy session. Last week, the US 10-year yield rose almost 50bps in 5 days, one of the biggest moves in that number of days since 1998.
• Cash JGBs are 1-4bps cheaper across benchmarks, with a steepener curve. The benchmark 10-year yield is 1.3bps higher at 1.337% versus the cycle high of 1.596%.
• Swap rates are 1-5bps higher. Swap spreads are wider.