MNI China Daily Summary: Thursday, August 1

MNI: BOE VOTES 5-4 FOR 25 BPS RATE CUT AT AUG MEETING

MNI BRIEF: BOJ To Focus On Continued Positive Wage Setting

MNI BRIEF: CNB Cuts 2W Repo Rate By 25Bps To 4.5%

MNI BRIEF: Japan Q2 GDP To Rise 0.5% Q/Q; 2.2% Annualised

MNI BRIEF: China Retains Ample Policy Space In H2 – NDRC

MNI: US Q2 PREL UNIT LABOR COSTS +0.9% VS Q1 +3.8%; Y/Y +0.5%

MNI: US JOBLESS CLAIMS +14K TO 249K IN JUL 27 WK

VDMA Factory Orders Remain Weak in June

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

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BBVA Look For Attractive Entry Points To Short LatAm Currencies

LATAM FX
  • In general, given the negative carry momentum in the region, BBVA would look for attractive entry points for short positions against LatAm currencies. Attractive levels for the various crosses include USDBRL 4.85, USDCOP 3865 or USDMXN 16.85.
  • For Peru in particular, the reduction of rates by the BCRP will keep the pressure on the local currency, and BBVA’s bias is still for weakness, even if stretched positioning suggests to them that prudence is best exercised with tight trailing stops to their preferred long USDPEN position. The revised suggested target remains at 3.90.
  • The recent political noise has finally led to a reshuffling of the cabinet, which was announced late on Tuesday. President Dina Boluarte currently has a very low approval rating (10%), and has had to deal with a recession and missed fiscal targets.
  • FinMin Alex Contreras, who has generally been well respected by both the markets and investors, was replaced by Jose Arista, an experienced economist. The change may keep some on the defensive, with a near-term focus on any change in strategy regarding the troubled state oil company.
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