The market reaction to the China NPC headlines has been rather limited at this stage. The aggregate growth target of around 5% was in line with market expectations.

• The other targets set for 2024 look to be in line with broad expectations as well. CPI at 3%, the same as last year, while monetary policy will be flexible, targeted and effective. In terms of fiscal policy local media (Xinhua) notes it should be proactive and appropriately intensified (BBG).
• The fiscal deficit was projected at 3% of GDP, versus 3.8% last year. Although last year's target was only widened in Oct to deal with the economic slowdown. Local governments will be allowed to sell 3.9 trln yuan in bonds, versus 3.8 trln last year.
• There is also a 1trln in ultra long debt issuance from the central government. This is reportedly only the fourth time such issuance has been utilized in the past 26 years (per BBG).
• Fiscal policy and how quickly it is implemented will likely be a key focus point for markets as 2024 unfolds.
• The market reaction in the fixed income space has been fairly limited. 2yr and 5yr government bond yields are down modestly, while the 10yr has slipped to 2.34% (off 1.3bps). This is back to lows from the end of last month. The 30yr is slightly higher though, last +1.6bps to 2.47%.
• USD/CNH is down a touch but overall vol remains very low, last near 7.2085. Onshore equities have recouped earlier losses, but overall gains are modest at this stage.