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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
Post Wednesday's Asia close, USD/CNH got to highs near 6.9150, before pulling back to 6.8900. We got back to 6.9100 in NY trade, but didn't reach fresh highs. The pair currently tracks just under 6.9000. For Wednesday's session CNH lost a modest 0.18%, which left the NEER slightly higher, close to 126.40 (J.P. Morgan Index).
- On the data front today, we have Feb new home prices. This could be a focus point given yesterday's activity data showed a slightly improved tone to housing related activity. Jan house prices were flat.
- The other focus point will be on-going fallout from weakness in global banking/finance stocks. To the extent China is somewhat insulated from these moves we could see some relative outperformance in the equity space, which in turn could benefit CNH.
- The chart below plots the ratio of China to global equities, against USD/CNH, which is inverted on the chart. China outperformance in the equity space has generally been correlated with a firmer CNH back drop in recent months and vice versa when China equities underperform.
- Elsewhere, local bond market volumes were down sharply yesterday after brokers were reportedly told to stop providing data to third parties over data security concerns (see this link for more details).
Fig 1: USD/CNH (Inverted) Versus China To Global Equities Ratio
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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