MNI China Daily Summary: Monday, July 22

MNI BRIEF: PBOC Lowers Ceiling of Its Interest Corridor

MNI: China CFETS Yuan Index Down 0.05% In Week of Jul 19

MNI: PBOC Sets Yuan Parity Higher At 7.1335 Mon; -1.18% Y/Y

MNI: PBOC Conducts CNY58.2 Bln Via OMO Mon; 7day Repo Rate Cut

MNI BRIEF: PBOC Cuts 7-Day Repo Rate By 10bp

CBRT Data Watch

NBH Data Watch

Pay concerns push back easing expectations; curve flattens

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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China PMI Beats Help A$ Sentiment Stabilize

AUD

AUD/USD is up slightly from NY closing levels. The pair last around 0.6860, although we haven't been able to make much headway beyond this level (highs for the session are at 0.6867). The better than expected China PMI prints (49.4 versus 49.2 expected for manufacturing, 52.6 versus 52.3 expected for non-manufacturing) helped offset weaker than expected Australian Q2 construction data.

  • The China composite PMI was 51.7 versus 52.5 in July, so that fits with some loss of China economic momentum through August, although arguably not as bad as feared.
  • For the A$ we are seeing some stability in key commodity prices like iron ore (last $98/tonne), which will be helping at the margin.
  • The AU-US 2yr spread continues to drift lower though, with 2yr AU ticking down to 2.95%. This puts the spread back to -47bps, around -3bps from opening levels.
  • Yield momentum is also weighing on the AUD/NZD cross. This pair is back sub 1.1200 (last 1.1190), although we have seen some stability post the China data (earlier lows were just above 1.1170).
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