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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.
CNH
USD/CNH was mostly on the back foot post the Asia close on Friday, although couldn't sustain moves sub 7.1500 in NY trade. We closed at 7.1526, a CNH gain of 0.25%, but sit slightly higher in the first part of trade this morning. USD/CNY closed sub 7.1500, while the CNY NEER (J.P. Morgan index) rose 0.14% to 121.10.
- On the data front today we get July official PMI readings. The market doesn't expect much change in either print relative to June readings, at least in terms of the consensus. For manufacturing the forecast sits at 49.0, (prior 49.0) while for the non-manufacturing the consensus is at 53.0 (prior 53.2).
- The authorities will also hold a press conference at 3pm local time on measures to restore and increase consumption. Vice Chair of the NDRC, Li Chunlin, along with officials from other departments will announces measures (see this link for more details). This comes after measures were announced last Friday to boost consumer industries and make it easier for small firms to get access to funding.
- In the equity space, the Golden Dragon index surged nearly 7% in Friday US trade, bringing gains last week to 13.59%, while onshore equities also rallied (the CSI 300 up 2.32% for Friday's session). Support for the tech sector was cited as one positive factor, with the authorities reportedly asking large tech companies to provide case studies of their most successful start ups.
- This has helped drive a strong turn around in China versus rest of the world equity performance, see the chart below of this ratio plotted against USD/CNH (which is inverted on the chart).
Fig 1: China Versus Rest Of the World Equities & USD/CNH (Inverted)
Source: MNI - Market News/Bloomberg
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.
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