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SocGen See Backdrop Favouring Further USD/CNY Upsidem Expresses View via Options


SocGen see the current backdrop favouring positioning for further upside in USD/CNH via options, judging the optimized expression as long 3M 1x2x1 7.30/7.40/7.50 fly at 0.22% USD.

  • They see a plethora of disappointing data out of China, leading to deflation, and the possibility of further upside in US rates on the back of higher term premium and deteriorating fiscal prospects.
  • They also expect further weakness until year end in CNY driven by fundamentals and note that stronger fixings may not be effective.
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