CNH: USD/CNY Fixing Lower, Error Term Stays Positive

• 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%.

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. 

• CHINA PBOC CONDUCTS CNY92 BLN VIA 7-DAY REVERSE REPO WEDS