MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

CBI Price Expectations for Three Months Ahead Lowest Since December 2020

MNI: UK JUL CBI INDUSTRIAL TRENDS TOTAL ORDERS -32

Broad-Based IFO Weakness Reinforces Narrative of Recovery Stall

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

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Currency Markets Consolidating Ahead Of Key US Data

FOREX
  • Tuesday did little to alter the narrative across currency markets with the greenback trading in slightly firmer territory but largely consolidating following the renewed weakness seen since Friday’s data.
  • The greenback did have a small move lower after the release of Fed Chair Powell’s speech where some potential outside expectations that he might push back against some of the recent dovish re-pricing failed to come to fruition.
  • While most of those moves largely reverted to prior levels, EURUSD does sit a little higher on the day, showing clear and relative outperformance to its G10 counterparts.
  • A strong recovery extended Monday in EURUSD, confirming the end of the recent corrective pullback. The bull trigger at the Dec 15 high at 1.0735, has been cleared and this confirms a resumption of the uptrend. The break higher maintains the bullish price sequence of higher highs and higher lows and note that MA studies are in a bull-mode position. The focus is on 1.0787, the May 30, 2022 high.
  • CNH sits slightly lower on an intraday basis, but USD/CNH did manage a lower low during Asia-Pac hours. This put the pair at new multi-month lows of 6.7589. 6.7359 sits as next support, the Aug 15 2022 low.
  • In emerging markets, it is worth noting some outperformance for LatAm currencies where USDMXN is hovering at near 3-year lows and the Brazilian Real continues to bounce back following the weekend’s heightened social unrest.
  • Aussie CPI & Retail Sales data is due overnight, however, markets will quickly turn their focus to the key release of US CPI on Thursday.
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