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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
CNH is underperforming broader USD softness. After hitting earlier lows close to 7.2600 the pair rebounded to 7.2866, before settling back under 7.2800. We last tracked near 7.2780/90. This is modestly above NY closing levels from Wednesday and goes against the ~0.15% BBDXY drop and softer US yields.
- CNH deposit rates in Hong Kong have ticked up further, the 1 month to 5.14%, highs back to 2018. The 3 month surged to 4.42%, also fresh highs back to 2018.
- As we noted earlier, CNH implied yields have edged down from recent highs. So, this may be providing some offset, although the implied yields and the CNH HIBOR deposit rates tend to move closely together, see the chart below for the 1 month. CNH TN points are also back to +5.
- Another potential headwind is the weaker onshore/HK equity tone. Northbound stock connect flows have also been negative so far, -3.66bn yuan.
Fig CNH HIBOR Rates & CNH Implied Yield (1 month)
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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