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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
- With the China 10Y bond yield premium (over US 10Y) plunging to zero, investors have been questioning if the risk reward on USDCNY is now skewed to the upside following the sharp Yuan appreciation in the past two years.
- We also saw that the premium on the 2Y yield (China vs. US) went negative in the end of March following the dramatic surge in US ST rates in the past month.
- USDCNY has been trading above the 6.35 level in the past month after testing a local low at 6.3070 in the beginning of March.
- Key resistance to watch on the topside stands at 6.4050 (200DMA).
- The chart shows that the 10Y interest rate differential (between US and China) has smoothly led the USDCNY exchange rate by 12 months.
- Hence, selling pressure on the CNY could gradually increase in the coming months as the interest rate differential keeps reaching new highs.
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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