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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Dollar Index Set For Highest Weekly Close Since November 2020

FOREX
  • Broad dollar indices traded in a narrow range on Friday, posting a small loss as a recovery in equity indices stalled the strong dollar rally on the week.
  • The Dollar index (DXY) will close at its best weekly level since November 2020 amid concerns over global growth and rising geopolitical risks that weighed heavily on sentiment and saw commodity prices slump and investors flock to haven currencies.
  • Without any significant data/event risk, Friday acted as a consolidation day for most G10 currencies. However, with EURUSD edging back towards 1.17, euro crosses saw some further support with EURAUD and EURNZD rising around 0.3%.
  • USDCAD had a notable spike above the year's best levels, printing fresh highs at 1.2949, before falling a big figure throughout the US session to close around 1.2850. The break of 1.2807 earlier in the week confirmed the resumption of the uptrend and today's rally fell just short of 1.2957, the high from Dec 21, 2020 and a Fibonacci projection at 1.2976. These levels remain firm short-term resistance.
  • In emerging markets, further weakness in the South African rand (down 1%) was trumped by a 1.4% move lower in the Mexican peso. The deterioration in technical conditions for the peso has seen solid follow through on the break above 20.25 in USDMXN.
  • Flash PMIs will kick off next week's data calendar before markets will eagerly anticipate Fed's Jerome Powell at the Jackson Hole Symposium later in the week. On Friday, markets will also receive US Core PCE price data.
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