MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

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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Greenback Supported By Firmer US Services PMI, USDJPY Extends Recovery

FOREX
  • A stronger-than-expected US Services PMI print further weighed on the front-end of the TSY curve, bolstering the US Dollar on Wednesday. The greenback index had largely been consolidating before the data after yesterday’s strong recovery, however, there was a notable uptick following the above consensus reading. Despite a 30 tik retreat off the intra-day highs, the USD Index (+0.25%) has marginally extended on yesterday’s rebound.
  • A consolidation of hawkish Fed rhetoric over the past 24 hours continues to fuel the renewed optimism for the greenback keeping the USD underpinned as we approach Friday’s important jobs report.
  • Bottom of the G10 pile on Wednesday is the Japanese Yen with USDJPY posting another huge daily range. The 134 handle initially capped the rally overnight in Asia and evidence of the significant volatility, the pair pulled back as much as 150 pips to 132.40 before consolidating above 133 for much of the European session. Price action continued to look perky into the US session and the ISM data prompted another spike in price to a daily high of 134.55, over 400 pips above yesterday’s low.
  • Mixed price action across the rest of G10 with no clear theme driving the price action. A decent rally in global equity benchmarks has benefitted the likes of AUD and CAD, filtering through to a boost for crosses such as AUDJPY and CADJPY which have both risen over 1%.
  • In similar vein in emerging markets, bolstered risk sentiment in equities helped the Mexican Peso rise 1.6%, however, the move largely reflects a reversal of the steep rally in USDMXN on Tuesday, with the pair just marginally above yesterday’s close.
  • The Bank of England is the headline risk event on Thursday. The median surveyed estimate looks for a 50bp hike to bank rate, however, some analysts are predicting a smaller 25bp increase.
  • A relatively light docket in the US (jobless claims and trade balance data) paves the way for Friday’s release of US Non-Farm payrolls.
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