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J.P.Morgan: Slow Boil Weakness Is Likely To Continue

CNY

J.P.Morgan have noted that “the broad macro backdrop featuring near-term downside cyclical risks domestically alongside medium-term uncertainties around China’s export outlook in an increasingly challenging external environment does not bode well for CNY FX. Runaway currency deprecation pressures, however, look less acute compared to April/May given already extreme bearish investor positioning in CNY and lightened-up foreign flows into Chinese assets. We stay long USD/CNH. In options, the CNH vol surface is highly distorted relative to historical norms.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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