CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS TUES

CHINA SETS YUAN CENTRAL PARITY AT 7.1059 TUES VS 7.1043

MNI China Daily Summary: Thursday, April 22

MNI BRIEF: Brazil CenBank Faces Greater Uncertainty - Campos

MNI BRIEF: China To Quicken Resolving Local Debt Risks

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

EZ/UK T-Bill Calendar: 3/6-Month ATB Auction on Tuesday

EZ/UK Bond Supply Calendar: EU, FI Synds; IT, DE Auctions Tues

MNI: CANADA MAR INDUSTRIAL PRICES +0.8% MOM; EX-ENERGY +0.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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GBPUSD Sinks 2% In Fed/BoE Aftermath

FOREX
  • The US Dollar surged on Thursday as markets digested a hawkish FOMC press conference and the greenback extended the strong reversal higher from late Wednesday. The expectation of a higher terminal rate for the Fed continues to see pressure on front-end rates, underpinning a significant 1.45% advance for the USD index.
  • The biggest victim to the dollars advance has been GBP. Cable had dropped roughly 150pips in advance of the Bank of England decision/statement and despite delivering a substantial 75bp hike, the lacklustre growth forecasts and rhetoric on rates dampened GBP sentiment further.
  • The pair remains close to the lows at 1.1170 as of writing, down 2% on the session. Having now broken below support at 1.1272, the next target on the downside resides at 1.1061, the October 21 low, before 1.0924, low on Oct 12 and a key short-term support.
  • In a relatively less pronounced move, EUR/USD (-0.62%) is now back below key support at 0.9812 today, which marked the top of the bear channel that was breached last week. A clear break of this support now undermines the recent bullish outlook and signals scope for a deeper pullback.
  • Showing impressive resilience in the face of a firmer USD are both the Mexican peso and the Brazilian Real, with the latter continuing to benefit from the apparent smooth transition occurring following former President Lula’s victory in Sunday’s presidential election.
  • Markets largely consolidated in the hours approaching the APAC crossover in anticipation of tomorrow’s release of October non-farm payrolls. Consensus looks for a payrolls report that would imply only a marginal easing in labor market tightness in October, with supply struggling to recover to pre-pandemic levels and an u/e rate near record lows.
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