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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.
CHINA
- In its latest Q1 monetary policy report, the PBoC reiterated that it will not flood the economy with stimulus and will remain pro active to boost confidence, which has been plunging in recent months amid surging stagflation risks and elevated geopolitical uncertainty.
- This week, the PBoC is expected to release its April update on the aggregate financing data, which is expected to rise by 2.2tr CNY after a 4.65tr CNY jump in March (top chart).
- China annual change in ‘liquidity’ (TSF 12M sum) is expected to continue to rise, increasing to 667bn CNY (up from a record low of -5.1tr CNY reached in October 2021).
- Even though the rise in liquidity should be strongly supporting risky assets (particularly ‘liquidity sensitive’ sector such as tech), the global risk off environment has left China equities vulnerable.
- The Hang Seng index is down over 6% since Thursday high and has been testing its ST support at 20,000; next key level to watch on the downside stand at 18,235, which was the low reached on March 15.
- The easing policy signals combined with the rise in liquidity have been mostly impacting the Chinese yuan, which is now down over 5% since mid April, with USDCNY breaking above the 6.70 resistance on Monday.
- Next level to watch on the topside stands at 6.7420, which corresponds to the 50% retracement of the 6.307 – 7.1780 range.
Source: Bloomberg/MNI
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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