China Weekly Dynamics

The report highlights the PBoC's debut overnight reverse repo operation and anticipates a gradual improvement in Chinese economic growth during the second half of 2026 supported by fiscal policy.

Key Takeaways

• 1.The PBoC has initiated an overnight reverse repo operation at 1.25%, interpreted as a sign of continued easing rather than an imminent policy rate cut.
• 2.Domestic activity growth is expected to remain soft in June before a gradual H2 improvement as fiscal support scales up.

Table of Contents

• Macro: growth could improve in Q3 after a weak Q2
• CNY still outperforming, PBoC ON reverse repo
• Asset overview and flows
• Macro: Trade dynamics
• Macro: Demand and supply snapshot
• Macro: Prices and inflation
• Macro: monetary and fiscal condition
• FX market: Market dynamics
• FX market: Macro Fundamentals
• FX market: Forwards & options
• Fixed income market: Performance
• Fixed income market: Money market and liquidity
• Fixed income market: Primary market
• Fixed income market: Interbank bond holding
• Calendar

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