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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.
CNH
The BBDXY pulling back from best levels sees USD/CNH off highs, although the move is shallow, leaving spot ~150 pips firmer on the day at ~CNH7.1790.
- The lack of meaningful, imminent stimulus after Friday’s State Council, coupled with the lack of a larger cut for the 5-Year LPR (both the 1- & 5-Year LPR fixed 10bp lower), which could have been used to generate further support for the property sector, underpin USD/CNH, leaving the well-defined technical uptrend channel intact (upper boundary of CNH7.1874 today).
- Net northbound Hong Kong Stock Connect flows have been mixed to start the week after the two largest rounds of net daily purchases since February were seen ahead of the weekend.
- Chinese equities struggled for upward momentum given the above backdrop, with the CSI 300 -0.2% at the close, while the Hang Seng was ~1.5% lower on the day.
- 10-Year CGB yields were ~2bp lower on the day, while 5-Year IRS shed 3.5bp, providing further headwinds for the yuan.
- Tier 1 sell-side names have continued to cut their Chinese GDP projections in recent days, on the back of the recent run of economic data and lack of swift and broad policy stimulus.
Fig. 1: USD/CNH
Source: MNI - Market News/Bloomberg
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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