MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI BRIEF: Brazil CenBank Faces Greater Uncertainty - Campos

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

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

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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Greenback Pares Gains In Late NY Trade, JPY Weakness Prevails

FOREX
  • The greenback initially traded more positively on Tuesday, recovering the Memorial Day retreat. The USD index rallied just under 1% from Monday’s low of 101.30 to reach an intra-day high print of 102.16 before backing off throughout the latter half of NY trade.
  • Initial US dollar strength was due to weakness across global equity benchmarks and higher core yields, however, the late recovery in equities worked against the greenback’s advance with the DXY retreating around 0.5%.
  • While most other major currencies weakened against the dollar, the Japanese Yen was under particular pressure with USDJPY rising substantially from the overnight 127.53 lows. USD strength was initially to blame with the late bounce in stocks further supporting the pair. Technical support at the 50-day EMA remains intact with the average intersecting at 126.10, while a further recovery would open 129.78 resistance, May 17 high.
  • EURUSD edged off recent highs Tuesday, reversing off a challenge on the top of the bear channel. The channel is drawn from the Feb 10 high and intersects at 1.0804. It marks a key short-term resistance where a break would strengthen bullish conditions and highlight a stronger short-term reversal. The primary trend remains down though and further weakness would reinforce a bearish theme.
  • Aussie GDP data is the focus for the Wednesday APAC session before new data for euro area unemployment, German retail sales and final manufacturing PMIs headline the European docket.
  • Wednesday’s also marks the Bank of Canada meeting. The BOC is almost unanimously expected to hike its overnight rate by another 50bp to 1.5% on Wednesday, part of its journey to neutral, defined as 2-3%. The statement-only release is likely to maintain its hawkish tone to keep inflation expectations from de-anchoring but offer little in the way of new guidance – i.e. rates need to increase further with timing and pace guided by the inflation target.
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