MNI China Press Digest July 17:  Investment, LPR, H2 Priority

MNI BRIEF: NZ CPI Prints Lower Than Expected At 3.3% Y/y

MNI: PBOC Net Injects CNY268 Bln Via OMO Wed; Rates Unchanged

CHINA PBOC CONDUCTS CNY270 BILLION VIA 7-DAY REVERSE REPOS WED

MNI: PBOC Sets Yuan Parity Lower At 7.1318 Wed; -1.32% Y/Y

CHINA SETS YUAN CENTRAL PARITY AT 7.1318 WED VS 7.1328

June Exports Miss, Electronic Exports Fall, Lagging Other Parts Of Asia

EZ/UK Bond Supply Calendar: Greece, UK, Germany Due Wednesday

EZ/UK T-Bill Calendar: Portugal, EU Auction on Wednesday

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

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Deutsche Bank Remain Constructive On Carry Trades

LATAM
  • Deutsche Bank believe that low vols, a rangebound US dollar and cautious central banks remain supportive of carry trades. In their view, valuation and BoP favour BRL within the high yielders. They are short EURBRL, with a target of 5.25. Flows and carry also remain supportive of MXN, but previous outperformance and positioning limit potential upside. On PEN, DB believe that recent appreciation seems excessive particularly vs. CLP and they would position for retracement. They would sell PENCLP at 263, with a target of 254.
  • In the fixed income space, DB note that although the Fed being on hold for now will hinder performance, they expect domestic drivers to prevail. They recently took profit in COP and CLP short-end receivers but see value in the short end of their cash curves. In their view, Brazil’s short end offers the most premium, and they stay long 2Y with a target of 9.25, but uncertainty on inflation, fiscal accounts, and activity must ease for receivers to reprice. In Mexico, DB stay long 5Y TIIE (target 8.20) and MBono 2029 (target 8.50) as the short end would be more sensitive to possible pauses. They also hold SOB 2032 in Peru, with a target of 5.80, which has lagged.
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