MNI: PBOC Net Drains CNY51.03 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1364 Tues; -1.28% Y/Y

CHINA PBOC CONDUCTS CNY216.27 BILLION VIA 7-DAY REVERSE REPOS TUES

CHINA SETS YUAN CENTRAL PARITY AT 7.1364 TUES VS 7.1316

MNI China Daily Summary: Monday, July 29

MNI: PBOC Net Injects CNY243.37 Bln via OMO Monday

MNI: FRANCE Q2 FLASH GDP +0.3% Q/Q, +1.1% Y/Y

MNI: FRANCE JUN CONSUMER SPENDING -0.5% M/M, -1% Y/Y

Australia Jun Total Dwelling Approved -6.5%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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SocGen Favour Short EUR/AUD Via Spot & Options on Hawkish RBA

AUD
  • SocGen write that the RBA’s hawkish bias is at odds with other central banks, sees value in EUR/AUD downside via options
  • SocGen recommend short EUR/AUD spot at 1.65, targeting 1.55, with a stop of 1.68.
  • They also see value in buying EUR/USD 3m 1.60/1.58 put spreads
  • They write that as low FX vol tends to sustain a pro-carry environment, a higher repricing in AUD rates would benefit the currency, and as such AUD is most likely to perform well against EUR.
  • Resultingly, they see short EUR/AUD spot with a tight stop-loss to take advantage of rate differentials, but note that investors can also take advantage of low implied vol to trade a move below 1.60 via tight puts spreads with low-delta strikes.
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