MNI China Daily Summary: Tuesday, December 31

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AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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CNH: USD/CNH Spot Near 7.1200, 1 Week Implied Vol Close To Multi Year Highs

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USD/CNH sits near 7.1225 in early Friday dealings. The pair couldn't get under 7.1200 through Thursday trade, with yen a notable outperformer in the G10 space. CNH edged higher against the USD for Thursday's session, but still lost 1.63% for the month of October. Spot USD/CNY finished up at 7.1180. The CNY CFETS basket edged a little higher on Thursday, up 0.10% to 99.765. This index was comfortably higher in October as the yuan outperformed broader USD gains. 

  • For spot USD/CNH we have the 20 and 50-day EMAs nearby at 7.1160/70. The 100-day is close to 7.1460, with the earlier break higher this week through this resistance point proving false.
  • USD/CNH 1 week vol continues to surge, last near 13.5% for implieds. This is closing in on multi year highs around 14%, see the chart below. This comes ahead of next week's US election, where a Trump victory is generally seen as quite bearish yuan in terms of the tariff/trade outlook.
  • Elsewhere, China home sales rose in y/y terms for Oct, the first positive gain in 2024 (per BBG). This is showing some of the positive effects of the recent stimulus/easing measures. The CSI 300 real estate index finished down for Oct, but this followed a 35.5% gain in Sep.
  • Today on the data front, we have the Caixin manufacturing PMI for Oct. The market consensus is for a 49.7 outcome, versus prior 49.3. recall yesterday's official manufacturing PMI rose to 50.1, the first expansion month since April.  

Fig 1: USD/CNH 1 Week Vols Close To Multi Year Highs 

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USD/CNH sits near 7.1225 in early Friday dealings. The pair couldn't get under 7.1200 through Thursday trade, with yen a notable outperformer in the G10 space. CNH edged higher against the USD for Thursday's session, but still lost 1.63% for the month of October. Spot USD/CNY finished up at 7.1180. The CNY CFETS basket edged a little higher on Thursday, up 0.10% to 99.765. This index was comfortably higher in October as the yuan outperformed broader USD gains. 

  • For spot USD/CNH we have the 20 and 50-day EMAs nearby at 7.1160/70. The 100-day is close to 7.1460, with the earlier break higher this week through this resistance point proving false.
  • USD/CNH 1 week vol continues to surge, last near 13.5% for implieds. This is closing in on multi year highs around 14%, see the chart below. This comes ahead of next week's US election, where a Trump victory is generally seen as quite bearish yuan in terms of the tariff/trade outlook.
  • Elsewhere, China home sales rose in y/y terms for Oct, the first positive gain in 2024 (per BBG). This is showing some of the positive effects of the recent stimulus/easing measures. The CSI 300 real estate index finished down for Oct, but this followed a 35.5% gain in Sep.
  • Today on the data front, we have the Caixin manufacturing PMI for Oct. The market consensus is for a 49.7 outcome, versus prior 49.3. recall yesterday's official manufacturing PMI rose to 50.1, the first expansion month since April.  

Fig 1: USD/CNH 1 Week Vols Close To Multi Year Highs 

Keep reading...Show less