MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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OPTIONS: USD/JPY upside demand buoys overnight options trade

OPTIONS
  • Countering a few quiet sessions at the beginning of the week, Wednesday FX hedging activity is more inline with average, with busier JPY, HKD and AUD/NZD markets boosting overall volumes. Vol markets are more subdued, notably in GBP crosses as the smooth transition from a Conservative, to a Labour majority this week is not expected to roil the currency. 
  • Demand for upside exposure in USD/JPY has characterized overnight trade, mirroring the run higher in spot and the fresh multi-decade high at 161.94 and resulting in a put/call ratio of ~0.8. ITM calls have traded in size between 159.25 - 160.00, however interest has also been noted as high as Y164.10-164.50. 
  • We wrote earlier this week that USD/CNY downside had been a popular theme, however trade overnight has leaned toward calls in the pair - with sizeable structures trading in early Europe/late Asia, potentially consistent with a 7.05/7.15/7.30/7.40 long call ladder targeting a late October expiry. 
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