Weaker yuan against the USD today, biggest drop for it in 3 weeks

PBOC inject 100bn yuan through reverse repos in open market operations (OMOs) today:

  • To inject 70 bn yuan through 7-day reverse repos
  • To inject 20 bn yuan through 14-day reverse repos
  • To inject 10 bn yuan through 28-day reverse repos

A 100bn injection today in money markets, but once maturing RRs taken into account the net is a 20bn injection

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Earlier today from China ...

Headlines via Bloomberg:

  • Prudent policy good for efficient leveraging ... lowering debt via economic growth is the best way to deal with high leverage (PBOC official Ji Min)
  • PBOC official (Ji Min still) warns of asset bubbles from reliance on stimulus

(file that second one under "warns again")

And a commentary piece in Economic Information Daily:

  • GDP expected to remain in 6% to 7% range for 2017
  • GDP growth to slow in H2 as less stimulatory policy in H2 after the strong H1

Negatives for H2:

  • Continued deleveraging
  • Inventory replenishment cycle ending

Positives:

  • Better domestic consumption
  • Improving external demand
  • Stronger PPI