MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

CBI Price Expectations for Three Months Ahead Lowest Since December 2020

MNI: UK JUL CBI INDUSTRIAL TRENDS TOTAL ORDERS -32

Broad-Based IFO Weakness Reinforces Narrative of Recovery Stall

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

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Market Roundup: Hot CPI Spurs 100Bp Hike Chances for July

US TSYS
US rates gapped lower following hot June CPI read (30YY hit 3.2256% high), has drawn some recent buying off lows but coming under pressure again, 30YY back to 3.1923% at the moment. Data metrics:
    • CPI for Services (60% of the whole) is +0.9% MoM, +6.2% YoY.
    • CPI for Goods (40%) is +2.1% MoM +13.6% YoY
    • Energy prices were up 7.5% MoM, +41.6% YoY
    • Food and Beverage prices rose 1.0% MoM, +10.0% YoY
    • Housing related prices were up 0.8% in June.
    • Owners’ Equivalent Rent was +0.7% MoM, +5.5% YoY, highest since 1990.
  • Short end Eurodollar futures under heavy pressure, lead quarterly EDU2 trading 96.46 (-0.225) consistent w/ Fed Funds at 3.25%. Markets pricing in appr 40% chance of 100bp hike from the FOMC at the end of the month, more likely two concurrent 75bp hikes.
  • Equities not taking kindly to the data, SPX emini ESU2 futures slipped to 3753.50 low, drawing some dip buyers 3770.0 last (-53.0).
  • Technicals for TYU2: Key short-term support is at 116-11, the Jun 28 low where a break is required to strengthen a bearish threat and this would signal scope for a deeper retracement. On the upside, attention is on the short-term bull trigger at 120-16+, the Jul 6 high. A break would resume the uptrend.
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