China's liquidity move calms currency markets

The People’s Bank of China released its highest short-term liquidity since October this week, easing pressure on money markets. The People’s Bank of China’s short-term liquidity move has eased money markets. The bank provided 9 billion yuan ($1.3 billion) of liquidity through daily open market operations. Interbank’s overnight repo funding cost fell by the biggest weekly drop in six weeks. The yield on the 1-year note fell 5 basis points today after rising more than 30 basis points in the previous five sessions. The yield on the 10-year note rose 1 basis point to 2.8 percent. Kiyong Seong, Asia strategist at Societe Generale in Hong Kong, shared his forecast that the reopening of the economy will put upward pressure on Chinese bond yields. He predicted that the yield on the 10-year note will be 2.9 percent by the end of this year and rise to 3 percent in the first quarter of 2023.