MNI China Daily Summary: Monday, July 29

MNI: China CFETS Yuan Index Up 0.15% In Week of Jul 26

MNI: PBOC Net Injects CNY243.37 Bln via OMO Monday

MNI: PBOC Sets Yuan Parity Higher At 7.1316 Mon; -1.56% Y/Y

CHINA PBOC CONDUCTS CNY301.57 BILLION VIA 7-DAY REVERSE REPOS MON

CHINA SETS YUAN CENTRAL PARITY AT 7.1316 MON VS 7.1270

CBI Retail Sales Fell Faster Than Expected For The Second Month

MNI: UK CBI JUL DIST TRADE REPORTED SALES -43

MNI: UK BOE JUN MORTGAGE APPROVALS 59,976

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Commerzbank See Longer-Term Risks to BRL

BRAZIL
  • Commerzbank write that for the time being, USD/BRL should trade around current levels, however they see BRL depreciation risks returning over the longer-term.
  • They write that USD/BRL has already reached their target of 4.95 and should remain around this level, supported by attractive real interest rates. However, they are concerned that the government could increase its influence on monetary policy which could lead to a renewed weakening of the real. So far, all the government has done is verbally attack the BCB, but the relationship is fragile. The next showdown will come in June, when the inflation target will be under review.
  • Commerzbank fear that the BCB will move closer to the government's line when Neto's term ends at the end of 2024. This is likely to weigh on the BRL.
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