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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China aggregate financing came in lower than expected in October, up 1.59tr CNY (vs. 1.7tr CNY exp.), down from revised 2.9tr CNY the previous month.
- The annual change in 'liquidity', which we define as the annual change in China Total Social Financing (TSF) 12M sum, continues to contract.
- The top chart shows that China liquidity has been contracting sharply in the past year, down from over 10tr CNY in October 2020 to -5.2tr CNY last month, which has been weighing on both domestic and international asset prices.
- A fall in Chinese liquidity has generally been associated with a rise in risk aversion with investors seeking for 'safe' assets such as US Treasuries or USD.
- The bottom chart shows how the annual change in China TSF 12M sum has strongly led EURUSD exchange rate by 6 months in recent years.
- Is the USD about to move broadly higher?
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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