Free Trial

Is Counter-Cyclical Factor Back?

CNY

Several sell-side desks see today's wide miss in the daily yuan fixing as a sign of the effective reintroduction of a counter-cyclical factor.

  • RBC note that "the arbitrary adjustment to the fix has been so prevalent since September" that the People's Bank could as well "just formalise it." They believe "that would strengthen the market's perception that the PBOC is getting serious about at least slowing down the renminbi."
  • ANZ say that today's fixing could be due to the reintroduction of cross-cyclical factor in calculating the reference rate. They add that "while it is a clear message that the authorities are getting uncomfortable over yuan strength and are seeking to draw a line," they do not believe that the PBOC "want to see the yuan weakening too much from here" and today's fixing could be just a one-off "reset."
  • Mizuho believe that the PBOC "just don't want too sharp an appreciation in a soft period" but are not fundamentally concerned about broader yuan strength.

To read the full story

Close

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.