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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EUR/GBP Upside Demand Supports Hedging Activity

OPTIONS
  • More sanguine currency options markets so far Friday, but EUR/GBP hedging markets more active, with interest in calls with strikes layered between 0.8890-8925 particularly notable. The bulk of trades roll-off at year-end - meaning the contracts capture the November, December BoE meetings and October, December ECB. Options pricing puts the implied probability of EUR/GBP trading above 0.8890 at 21.4%.
  • Despite spot's run higher toward Y150.00 today, front-end implied vols across USD/JPY remain subdued, although today's correction off the handle may have lent some support to the 1m contract: higher by 0.5 points to 8.4points after trading a new multi-month low of 7.6 points last week. Risk reversal skews are showing few signs of any expectations of a break higher in the pair: The 3m contract continues to trend with spot, but holds off the multi-month extremes from early Sept/late August.
  • Sizeable expiries are dictating play in EUR/USD today: spot is currently pinned between large strikes of E721mln at 1.0575 and E2.0bln at 1.0600.
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