MNI China Daily Summary: Friday, January 10

MNI BRIEF: China To Adopt Very Proactive Fiscal Policy-Offical

CANADA LIBERAL LEADERHIP VOTE TO REPLACE TRUDEAU SET FOR MAR 9

MNI BRIEF: PBOC Suspends Bonds Trades As Yields Drop

MNI: PBOC Net Drains CNY14.8 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Higher At 7.1891 Fri; -2.36% Y/Y

MNI: FRANCE NOV INDUSTRIAL PRODUCTION +0.2% M/M, -1.1% Y/Y

MNI: FRANCE NOV CONSUMER SPENDING +0.3% M/M, +0.3% Y/Y

MNI: NORWAY DEC CPI -0.1% M/M, +2.2% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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FOREX: USD/JPY 150 Pips Off Lows as Sentiment Stabilises

FOREX
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  • The JPY is lower against all others into the midpoint of the European session, with USD/JPY bouncing near 150 pips off lows on steadier market sentiment. Mexico's Sheinbaum followed Canada's Trudeau in reaching out to President-Elect Trump to discuss recent tariff threats, in a conversation described by the leaders as "excellent" and "productive" - raising hopes that a sharp tariff step may not be necessary on day one of the new Presidency.
  • The USD/JPY recovery has met resistance at 151.94, the 23.6% retracement for the downleg off the Nov 15 high, which cuts as a key level ahead. Clearance here opens 152.86 for direction.
  • CAD outperforms, erasing the Trump tariff threat weakness, and gaining a second tailwind from firmer oil prices today. The newly struck Israel-Hezbollah ceasefire is already running into difficulties, with reports of "suspects" arriving in South Lebanon already breaching the terms of the agreement. WTI and Brent crude futures are higher by 0.5% as a result. USD/CAD tests 1.40 support, with 1.3987 the next level below.
  • Focus for the session ahead is likely to remain on European markets given the US market closure. Prelim national German CPI numbers are still due, for which MNI projects the national CPI (non-HICP print) fell by around 0.2 to 0.3% M/M (+0.4% Oct) and rose 2.2% Y/Y (+2.0% Oct).
  • The central bank speaker slate revolves around the ECB, with Villeroy, Lane and Knot set to speak - all of which will be watched for any indication that they also see the "limits" for easing policy next year that Schnabel warned of earlier in the week. 
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  • The JPY is lower against all others into the midpoint of the European session, with USD/JPY bouncing near 150 pips off lows on steadier market sentiment. Mexico's Sheinbaum followed Canada's Trudeau in reaching out to President-Elect Trump to discuss recent tariff threats, in a conversation described by the leaders as "excellent" and "productive" - raising hopes that a sharp tariff step may not be necessary on day one of the new Presidency.
  • The USD/JPY recovery has met resistance at 151.94, the 23.6% retracement for the downleg off the Nov 15 high, which cuts as a key level ahead. Clearance here opens 152.86 for direction.
  • CAD outperforms, erasing the Trump tariff threat weakness, and gaining a second tailwind from firmer oil prices today. The newly struck Israel-Hezbollah ceasefire is already running into difficulties, with reports of "suspects" arriving in South Lebanon already breaching the terms of the agreement. WTI and Brent crude futures are higher by 0.5% as a result. USD/CAD tests 1.40 support, with 1.3987 the next level below.
  • Focus for the session ahead is likely to remain on European markets given the US market closure. Prelim national German CPI numbers are still due, for which MNI projects the national CPI (non-HICP print) fell by around 0.2 to 0.3% M/M (+0.4% Oct) and rose 2.2% Y/Y (+2.0% Oct).
  • The central bank speaker slate revolves around the ECB, with Villeroy, Lane and Knot set to speak - all of which will be watched for any indication that they also see the "limits" for easing policy next year that Schnabel warned of earlier in the week.