Liquidity tightened sharply throughout June, pressured in part by increased local government bond issuance and the quarterly macroprudential assessments, the latest MNI Liquidity Conditions Index shows.

The Liquidity Condition Index stood at 81.3 in June, higher from the 30.0 recorded last month and hitting the highest level in 5 months. The higher the index reading, the tighter liquidity appears to survey participants.

• The Economy Condition Index continues to recover, with almost 70% of respondents seeing an improvement.
• The PBOC Policy Bias Index was little changed, although a quarter of those surveyed now saw the PBOS with a tightening bias.
• The Guidance Clarity Index was barely moved, with the central bank still seen giving clear indications of its intentions.

The MNI survey collected the opinions of traders at financial institutions operating in China's interbank market, the country's main platform for trading fixedincome and currency instruments, and the main funding source for financial institutions. Interviews were conducted between May 11 and May 25.