GLOBAL POLITICAL RISK: Trump Looking For Speedy End To Iran War - WSJ

The first day back from Lunar New Years sees a significant withdrawal of liquidity.  It may be too early to read anything into this as the daily operation adjusts to the various maturities it issued prior to the break.  

• The PBOC issued CNY526bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY852.4bn of 7-day reverse repo and CNY600bn of 14-day reverse repo.  
• Net liquidity withdrawal CNY926.4bn.
• 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 1.32%, from prior close of 1.42%.
• The China overnight interbank repo rate is at 1.36%, from the prior close of 1.30%.
• The China 7-day interbank repo rate is at 1.50%, from the prior close of 1.40%.

• CHINA PBOC CONDUCTS CNY526 BLN VIA 7-DAY REVERSE REPO TUES

The USD/CNY fix printed at 6.9414, versus a BBG market consensus of 6.9200. Note the last fixing on Feb 13, prior to the LNY break, was 6.9398, so we are a touch above that. The fixing error is tighter though at +214pips, form +329pips on Feb 13. USD/CNH is a little higher post the fixing, last around 6.8950 (close to 6.8900 pre the fixing outcome). The market may have been looking for a lower fixing outcome relative to the pre-LNY break but this would have gone against the firmer USD index backdrop over the break period. Focus will now be on the onshore spot open. As expected, from a little earlier we had the loan prime rates, for the 1yr and 5yr,which were left  unchanged.