Free Trial

Change Of Mood On China Covid Matters Undermines Sentiment


Risk aversion took hold in early Asia-Pacific dealing as Chinese health officials brushed away earlier press reports flagging potential for the relaxation of the nation's strict COVID Zero policies. The National Health Commission said that virus containment measures taken to date "are completely correct," pouring cold water on enthusiasm about the prospect of earlier re-opening.

  • Source reports surrounding alleged U.S. backdoor efforts to put Ukraine/Russia peace talks back on the table may have restrained risk-off flows to some degree, although Kyiv has not yet signalled readiness to abandon its view that it is impossible to negotiate with the current Russian administration in good faith.
  • The Antipodeans have retreated, leading high-beta FX lower, as both WTI and Brent futures have shed 1.5% and 1.2% respectively. AUD/NZD has see-sawed, having a look above Friday's high in the process, but last trades virtually unchanged.
  • Safe havens are in demand, with the greenback sitting atop the G10 pile as U.S. Tsy curve twist flattens. USD/JPY has added ~40 pips so far, chewing into last Friday's losses, and is testing the Y147.00 mark as we type.
  • Offshore yuan has weakened, with spot USD/CNH last 0.55% higher, as we await the PBOC fixing.
  • Regional calendar is fairly limited, with China's monthly trade data expected to cross the wires at an unspecified time today. After hours, focus will turn to German & Norwegian industrial output figures, as well as comments from Fed's Collins & Barkin, ECB's Lagarde & Panetta.

To read the full story



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.