MNI China Daily Summary: Wednesday, February 5

MNI: UK FINAL JAN SRVCS PMI 50.8 (FLASH: 51.2); DEC 51.1

MNI: EUROZONE JAN FINAL SRVCS PMI 51.3 (FLASH: 51.4); DEC 51.6

MNI BRIEF: China Spring Festival Trips Up 5.9% Y/Y

MNI: PBOC Net Drains CNY716.5 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1693 Weds; -1.18% Y/Y

MNI: EUROZONE DEC PPI +0.4% M/M, +0% Y/Y

MNI: GERMANY FINAL JAN SRVCS PMI 52.5 (FLASH: 52.5); DEC 51.2

MNI: FRANCE FINAL JAN SRVCS PMI 48.2 (FLASH: 48.9); DEC 49.3

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

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

GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

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CNH: Recent Ranges Hold, CNY Spot Near Trading Limit, Dec Inflation Today

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USD/CNH reached intra-session highs on Wednesday of 7.3615 post the Asia close, but drifted slightly lower from there. We track near 7.3530/35 in early Thursday dealings, after losing nearly 0.20% for Wednesday's session. Spot USD/CNY closed above 7.3300 and remained close to the upper daily trading band limit. For the CNY CFETS basket tracker we edged down a little further to 101.33 (per BBG), the third straight loss for the index. 

  • Recent ranges continue to hold for USD/CNH. The 20-day EMA support level continues to track higher, last near 7.3170, while recent highs rest at 7.3695.
  • Focus remains on spot USD/CNY being close to the upper daily trading limit. With the fixing remaining just under 7.1900, this will continue to curb upside in spot. BBG noted state banks were selling USD/CNY around the 7.3320 level yesterday.
  • The bias around today's fixing consensus from the market is likely to be higher, given the 4:30pm onshore close rose and we had further broad USD gains. Wides on the fixing error haven't got beyond -1600pips in recent years (yesterday's outcome was -1528 pips).
  • Broader USD sentiment was supported by reports incoming US President Trump is considering a national economic emergency declaration to allow for a new tariff program (per CNN). The Fed Mins lent hawkish, but Fed Governor Waller continued to press for rate cuts.
  • Locally today we have the Dec inflation outcomes. Headline CPI is projected at 0.1% y/y (prior 0.2%), while PPI is forecast at -2.4%y/y, versus -2.5% prior. Due between Jan 9 to Jan 15 is the Dec new loans/aggregate credit figures. 
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USD/CNH reached intra-session highs on Wednesday of 7.3615 post the Asia close, but drifted slightly lower from there. We track near 7.3530/35 in early Thursday dealings, after losing nearly 0.20% for Wednesday's session. Spot USD/CNY closed above 7.3300 and remained close to the upper daily trading band limit. For the CNY CFETS basket tracker we edged down a little further to 101.33 (per BBG), the third straight loss for the index. 

  • Recent ranges continue to hold for USD/CNH. The 20-day EMA support level continues to track higher, last near 7.3170, while recent highs rest at 7.3695.
  • Focus remains on spot USD/CNY being close to the upper daily trading limit. With the fixing remaining just under 7.1900, this will continue to curb upside in spot. BBG noted state banks were selling USD/CNY around the 7.3320 level yesterday.
  • The bias around today's fixing consensus from the market is likely to be higher, given the 4:30pm onshore close rose and we had further broad USD gains. Wides on the fixing error haven't got beyond -1600pips in recent years (yesterday's outcome was -1528 pips).
  • Broader USD sentiment was supported by reports incoming US President Trump is considering a national economic emergency declaration to allow for a new tariff program (per CNN). The Fed Mins lent hawkish, but Fed Governor Waller continued to press for rate cuts.
  • Locally today we have the Dec inflation outcomes. Headline CPI is projected at 0.1% y/y (prior 0.2%), while PPI is forecast at -2.4%y/y, versus -2.5% prior. Due between Jan 9 to Jan 15 is the Dec new loans/aggregate credit figures.