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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CNH
1 Month USD/CNH Risk Reversals have spiked higher in recent dealings, printing their highest level since mid March as investors look for upside protection on USD/CNH. However, 1M RR’s do remain below levels seen late in 2022 when USD/CNH was last around the 7 handle, see the chart below.
- For onshore USD/CNY we are also at multi month highs, but haven't breached the 7.00 handle yet. CNY daily option volumes on Wednesday are currently around 4 times their usual volume at this stage of the session. ~$3bn in USD/CNY options have been dealt today according to the latest DTCC data, ~$0.8bn is the average volume for this stage in the session.
- The moves in option markets come after yesterday's weaker than expected Chinese monthly activity data for April. A number of sell-side analysts have now cut their 2023 GDP growth projections for China.
Fig 1: USD/CNH vs 1 Month Risk Reversal
Source: MNI/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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