MNI China Press Digest July 26: Deposit Rates, Fiscal, PBOC

MNI: PBOC Net Injects CNY299.05 Bln via OMO Fri

MNI: PBOC Sets Yuan Parity Lower At 7.1270 Fri; -0.95% Y/Y

CHINA PBOC CONDUCTS CNY358.05 BILLION VIA 7-DAY REVERSE REPOS FRI

CHINA SETS YUAN CENTRAL PARITY AT 7.1270 FRI VS 7.1321

MNI BRIEF: Treasury's Yellen: Inflation Moving To Fed's Target

Japan Tokyo Jul Core CPI +2.2% Y/Y

MNI BRIEF: Japan July Tokyo Core CPI Rises 2.2% Vs. June's 2.1%

MNI JAPAN JULY TOKYO CORE CPI +2.2% Y/Y; JUNE +2.1%

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

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Options Point to Renewed S/T Concerns Over CNY Weakness

CNY
  • For a second session, CNY hedging volumes leading a more active FX options market. Upside protection remains in demand, with DTCC-tracked trade showing over $2 in USD/CNY calls trading for every $1 in puts. Overall volumes are also solid, with total notional traded more than double what you'd expect to see at this point in the session.
  • Call strikes at 7.05 and 7.10 have been in focus, with over $1bln notional traded at each strike across Asia-Pac/European hours. Front-end implied vols crept higher again this morning, putting 3m vols (briefly) at a new one-month high of 5.535 points. The vol curve continues to flatten on the week, providing further evidence of elevated short-term concerns now USD/CNY's north of 7.00.
  • Some of the more notable structures trading Thursday include a sizeable 7.05/7.15 call spread trading in early European hours, rolling off on July 20th. Trade breaks even on a move above ~7.0740 in spot.
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