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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 is slightly down from record overnight highs, last around the 7.3250 level. The pair stabilized after touching 7.3320 overnight. China related assets remained under pressure. In US trading the China Golden Index fell by a record 14%, after sharp falls for domestic equities yesterday (CSI -2.93%). This came after a record outflow from China shares via stock connect programs (2.5bn USD, or just under 18bn yuan), see the chart below.
- On a rolling monthly sum basis, which is the other line presented on the chart, we are still above trough points from earlier this year and in the early part of 2020.
- Implied vols for CNH are close to record highs for the 1 month, near 10%, close to levels last seen in early 2016.
- Onshore spot closed at 7.2630, while the 4:30pm level was 7.2610. The USD/CNH-USD/CNY spread is beyond +600pips based off current CNH levels.
- This implies upside for today's USD/CNY spot rate in onshore trading, although we need to see the fixing print higher, as yesterday we got very close to the upper daily trading limit (7.2655 was the daily limit (+2% above the 7.1230 fixing level)).
Fig 1: China Stock Connect Flows (Yuan Bn)
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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