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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.
CNH
USD/CNH was dragged higher post the Asia close on Tuesday, amid broad USD gains. The pair got to ~7.3440 in the NY session. This was below Oct 19 highs of 7.3470, but still a CNH loss of 0.22%. In early Wednesday trade, the pair is near 7.3410. Spot USD/CNY finished up noticeably lower, closing at 7.3164. The pair unable to breach the 7.3200 level. Yesterday's upside cap in the pair was ~7.3215 (+2% above the USD/CNY fixing level).
- The CNY NEER (J.P. Morgan Index), rose to 123.65, +0.23%, as the yuan outperformed broader USD gains.
- Outside of USD strength (led by yen weakness), CNH was likely weighed by yesterday's notable official PMI misses for October. Today we have a further update with the Caixin manufacturing PMI out. The market consensus is 50.8, versus 50.6 prior.
- The USD/CNY fixing will also remain in focus. Continued fixings sub 7.1800, caps USD/CNY spot close to the 7.3200 level. The USD/CNH - USD/CNY basis has widened though, see the chart below. We are sub earlier 2023 highs (at least based off closing levels).
- In the equity space, the Golden Dragon index lost 1.69% in Tuesday US trade, underperforming firmer trends in major US/EU indices. To recap the CSI 300 lost 0.31% for Tuesday's onshore session.
Fig 1: USD/CNH-USD/CNY Spot Differential
Source: MNI - Market News/Bloomberg
Why MNI
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.
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