MNI China Daily Summary: Wednesday, October 16

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MNI: PBOC Sets Yuan Parity Higher At 7.1191 Weds; +2.66% Y/Y

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AUSTRALIA: Albanese Lines Up Budget for May Election

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ASIA FX: USD/CNH Lower Amid Optimism Around Housing Press Conference

ASIA FX
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USD/CNH probed above 7.1400 in early dealings but couldn't test above intra-session highs from Tuesday (7.1434). We sit back lower now near 7.1260, a modest gain of close to 0.15%. 

  • Sentiment has been aided by a rebound in HK/China stocks, although volatility continued into the lunch time break. The CSI 300 was lower, but the Shanghai Composite up. Property stocks have jumped ahead of a press conference with the Housing Ministry and PBoC scheduled for Thursday.
  • Concern in the background will continue in the lead up to the US election given improving odds for Trump, who on Tuesday reiterated his trade/tariff stance.
  • Spot USD/KRW got to fresh highs of 1367.2 in early dealings, but sits back lower now near 1362, so around 0.20% firmer for the session in won terms. Onshore equities are off 0.60%, but away from session lows. Sentiment in the tech space has taken a hit after bellwether ASML posted disappointing earnings guidance. Earlier South Korean data showed a tick up in the unemployment rate to 2.5% but this was below market expectations.
  • USD/TWD has remained range bound, holding under recent highs for now. The pair at 32.175 in latest dealings. The local central bank noted it sold just over $9bn in H1 in the FX market to curb TWD weakness. 
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USD/CNH probed above 7.1400 in early dealings but couldn't test above intra-session highs from Tuesday (7.1434). We sit back lower now near 7.1260, a modest gain of close to 0.15%. 

  • Sentiment has been aided by a rebound in HK/China stocks, although volatility continued into the lunch time break. The CSI 300 was lower, but the Shanghai Composite up. Property stocks have jumped ahead of a press conference with the Housing Ministry and PBoC scheduled for Thursday.
  • Concern in the background will continue in the lead up to the US election given improving odds for Trump, who on Tuesday reiterated his trade/tariff stance.
  • Spot USD/KRW got to fresh highs of 1367.2 in early dealings, but sits back lower now near 1362, so around 0.20% firmer for the session in won terms. Onshore equities are off 0.60%, but away from session lows. Sentiment in the tech space has taken a hit after bellwether ASML posted disappointing earnings guidance. Earlier South Korean data showed a tick up in the unemployment rate to 2.5% but this was below market expectations.
  • USD/TWD has remained range bound, holding under recent highs for now. The pair at 32.175 in latest dealings. The local central bank noted it sold just over $9bn in H1 in the FX market to curb TWD weakness.