CHINA PRESS: Smaller Banks Under Pressure To Replenish Capital
Several city commercial banks are replenishing capital, mainly through increasing local SOE shareholding or private placement, 21st Century Business Herald reported. Bank of Qingdao said one shareholder planned raising its holdings through a subsidiary, while Hong Kong-listed Luzhou Bank expected at least HKD1.85 billion through issuing one billion new H-shares via private placement, the newspaper said. Small and medium-sized banks face capital replenishment pressure amid narrowing interest spreads and asset quality, the Herald added.
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AUSTRALIA DATA: Q1 Wages Stronger Than Forecast, Public Sector Gains Accelerate
Australian Q1 wages growth was slightly stronger than forecast at 0.9%q/q, versus 0.8% forecast and 0.7% prior., The y/y outcome rose 3.4%, versus 3.2% forecast and 3.2% prior.
The ABS detail suggested firmer public sector wages were a driver of the overall result: "Annual wage growth ticked up for the first time since the June quarter 2024. The 3.4 per cent increase in wages for the year to the March quarter 2025 was higher than the 3.2 per cent to the December quarter 2024, but lower than the 4.0 per cent at the same time last year."
"Seasonally adjusted private sector annual wage growth was unchanged from the December quarter at 3.3 per cent. Annual public sector wage growth was higher than the private sector at 3.6 per cent in the March quarter 2025, up from 2.9 per cent in the December quarter 2024." See this link.
CHINA: Central Bank Withdraws CNY103.5bn via OMO
- The PBOC issued CNY92 bn of 7-day reverse repo at 1.4% during this morning’s operations.
- Today’s maturities CNY195.5bn
- Net liquidity injected CNY103.5bn.
- 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 1.45%, from yesterday’s close of 1.51%.
- The China overnight interbank repo rate is at 1.40%, from the prior close of 1.50%.
- The China 7-day interbank repo rate is at 1.50%, from the prior close of 1.52%.
CNH: USD/CNY Fixing Down Further, But Error Term Positive
The USD/CNY fix printed at 7.1956, against a Bloomberg market consensus of 7.1842.
- This result delivered a positive fixing surprise of +114pips. This is the first such surprise since Nov 2024, although the last time we were above +100pips on this metric was in 2022.
- The fixing estimate fell sharply versus yesterday's outcome, with broader USD sentiment softening post Monday's gains. The actual fix was the lowest since Apr 3.
- USD/CNH hasn't reacted much to the fixing outcome, holding near 7.1950 in latest dealings, down slightly for the session.
