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PBOC announces higher reserve requirement.....>

CHINA
CHINA: PBOC announces higher reserve requirement for FX forwards, from 0% to 20%
- reversing the easing from 20% to 0% in September 2017. PBOC had previously
announced higher FX reserve requirements in August 2015 after sharp CNH
depreciation.
- With costs of shorting yuan rising, USD broadly weaker and CNH firmer (from
6.88 to 6.83).
- Risk appetite returning, with equities rising and flight-to-quality seen this
morning reversing.
- Bunds sold off (10-Yr yield up 1.2bps at 0.443%) and EUR strengthened (Italian
BTP yields also dropping with a delayed reaction.)

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