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.
Executive Summary:
- In the past week, business sentiment has started to pick up in China following the positive headlines on China ‘declaring victory’ on Covid.
- Hence, investors have been questioning if risky assets and CNY could receive support in the short term if soft data continue to improve.
- China 10Y Yield could also see further upward retracement in the current environment.
Link to full publication:
In the past week, business sentiment has started to pick up in China following the positive headlines on China ‘declaring victory’ on Covid. The National Health Commission announced on Tuesday that China will slash the quarantine time for inbound travellers by half (from 14 to 7 days) and will cut the at-home health monitoring from 7 to 3 days.
PMI surveys are out in the coming days and are expected to bounce back above the 50-line threshold that separates growth from contraction. For instance, ‘official’ manufacturing and non-manufacturing PMIs are expecting to rise to 50.5 (June 30) according to analysts.
Investors have started to question if China tech could experience a short-term rally in the coming weeks. We previously saw that tech equities have not responded to the strong rebound in China ‘liquidity’ since the start of the year. The chart below shows the significant divergence between year-on-year change in tech equities and China TSF (also referred as ‘liquidity’).
Source: Bloomberg/MNI
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.