MNI China Daily Summary: Friday, October 11

MNI: GERMANY SEP FINAL HICP -0.1% M/M; +1.8% Y/Y

MNI: PBOC Net Drains CNY183.8 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.0731 Fri; +3.03% Y/Y

CHINA PBOC CONDUCTS CNY94.2 BLN VIA 7-DAY REVERSE REPOS FRI

CHINA SETS YUAN CENTRAL PARITY AT 7.0731 FRI VS 7.0742

MNI: GERMAN SEP CPI +1.6 % Y/Y

MNI: UK AUG TRADE BALANCE GBP -0.95BN

MNI: UK AUG CONSTRUCTION OUTPUT +0.4% MM, +1% 3M3M, +0.3% YY

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

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ASIA FX: Won Aided By Hawkish BoK Cut, CNH Steady

ASIA FX
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North East Asia currencies are firmer against the USD, although the standout is the KRW. This followed a hawkish start to the BoK easing cycle. 

  • USD/CNH is down a touch, last near 7.0800. This leaves the pair comfortably within recent ranges. Onshore equities struggled in the first part of trade, with the CSI 300 down nearly 1.9%, as stimulus uncertainty continues. All eyes are on tomorrow's MOF fiscal briefing. Some sell-side analysts expect more meaningful measures to be introduced later this month when the NPC meets. Also note we get Sep inflation data on Sunday, while more China authorities meet on Monday to help the firm outlook.
  • Spot USD/KRW sits back under 1347 in latest dealings, after closing Thursday trade at 1354. This closing level was fresh highs back to mid August for the pair. The BoK cut rates by 25bps as widely expected, although only one board member sees rates lower in the next 3 months. Governor Rhee noted that financial stability in terms of household borrowing trends and property prices will be watch points for the central bank in terms of reaction to this cut. Local equities are higher, but the Kospi index remains close to the 2600 level.
  • Spot USD/TWD has remained relatively steady, the pair last at 32.17, so still within striking distance of recent highs. Local equities are up around 1% so far today. 

 

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North East Asia currencies are firmer against the USD, although the standout is the KRW. This followed a hawkish start to the BoK easing cycle. 

  • USD/CNH is down a touch, last near 7.0800. This leaves the pair comfortably within recent ranges. Onshore equities struggled in the first part of trade, with the CSI 300 down nearly 1.9%, as stimulus uncertainty continues. All eyes are on tomorrow's MOF fiscal briefing. Some sell-side analysts expect more meaningful measures to be introduced later this month when the NPC meets. Also note we get Sep inflation data on Sunday, while more China authorities meet on Monday to help the firm outlook.
  • Spot USD/KRW sits back under 1347 in latest dealings, after closing Thursday trade at 1354. This closing level was fresh highs back to mid August for the pair. The BoK cut rates by 25bps as widely expected, although only one board member sees rates lower in the next 3 months. Governor Rhee noted that financial stability in terms of household borrowing trends and property prices will be watch points for the central bank in terms of reaction to this cut. Local equities are higher, but the Kospi index remains close to the 2600 level.
  • Spot USD/TWD has remained relatively steady, the pair last at 32.17, so still within striking distance of recent highs. Local equities are up around 1% so far today.