Free Trial

Modest Outperformance, Aided By Lower US Yields, Official PMIs On Tap Today

CNH

USD/CNH sits close to 7.2075 in early Friday dealings. Dips in the pair were supported sub 7.2050 on Thursday, but we are comfortably off Wednesday highs just above 7.2200. USD/CNY spot ended back under 7.1900 on Thursday, so away from recent highs near 7.2000. The CNY NEER (J.P. Morgan index) rose nearly 0.20% to 124.63.

  • CNH benefited from the US yield pull back through Thursday, amid mixed US data, with the PCE coming in line with expectations, but initial jobless claims softer, likewise for the MNI Chicago PMI.
  • In the equity space, the Golden Dragon Index fell a little further in Thursday US trade. This followed strong onshore gains yesterday for the CSI 300, up nearly 2%, to end Feb on a positive note.
  • On the data front today we have the Feb official PMIs. Manufacturing is expected to print at 49 (form 49.2 prior), per the consensus, while services is forecast at 50.7, unchanged from the Jan reading.
  • Our policy team noted yesterday the manufacturing PMI should remain contractionary, "due to the recent Chinese New Year holiday and the economic recovery’s weak upward momentum, which may push the central bank to cut policy rates in coming months, sources familiar with the index told MNI (see this link)."
  • Focus will also be on the upcoming NPC in early March. Xinhua reported yesterday that China will strive to meet economic targets this year. This followed a Politburo meeting held on Thursday chaired by President Xi (see this link).

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.