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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.
CROSS ASSET
USD/CNH moves as low as CNH7.1041, before retracing to CNH7.1130. The technical uptrend channel remains intact on a closing basis and the 2 June low (CNH7.0670) represents initial support.
- State-run media outlets continue to circulate views re: the potential for yuan strength in H223.
- Peak China fears are seemingly in the rear-view for now, with continued discussion/reporting surrounding the likelihood of a meaningful stimulus package helping (the size and breadth of any package that does emerge will be key).
- That helped Chinese equities to rally further on Friday, with the CSI 300 adding ~1.0%, while international investors bought CNY10.5bn of mainland equities via the Hong Kong Connect schemes, in what was the largest day of net purchases seen since February.
- Chinese 10-Year yields and 5-Year NDIRS rates moved higher again today, once again suggesting that markets are moving beyond peak China fear.
- Participants are on the lookout for any State Council comments after recent speculation surrounding the potential for a meeting today.
- Looking ahead, there is some speculation that the 5-Year LPR could see a more meaningful move lower than the 1-Year LPR at next week’s monthly fixing, in a bid to further support the property and corporate sectors.
Fig. 1: USD/CNH
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
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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