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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.
CNH
USD/CNH is tracking higher, pushing above 7.1000 in latest dealings. This is through highs from early Friday last week, which reportedly saw state owned banks sell dollars onshore, per Reuters reports. This is fresh highs in the pair going back to Nov last year.
- Renewed weakness in the equity space, with headlines crossing of the HS China Enterprise Index entering bear market territory (-20% from late Jan peaks) is weighing. Onshore equities are also under pressure, the CSI 300 down ~0.60% and threatening a test of the 3800 level.
- As the chart below highlights, relative equity performance between China and the rest of the world has been a good gauge of CNH trends in the past 6 months (note USD/CNH is inverted on the chart). Northbound stock connect flows are modestly negative so far today.
Fig 1: USD/CNH (Inverted) Versus China To World Equity Ratio
Source: MNI - Market News/Bloomberg
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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