MNI China Daily Summary: Monday, July 29

MNI: China CFETS Yuan Index Up 0.15% In Week of Jul 26

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CHINA PBOC CONDUCTS CNY301.57 BILLION VIA 7-DAY REVERSE REPOS MON

CHINA SETS YUAN CENTRAL PARITY AT 7.1316 MON VS 7.1270

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MNI: UK BOE JUN MORTGAGE APPROVALS 59,976

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

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USD/CNH Above 7.2200, April Activity Figures & Housing Meeting In Focus

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USD/CNH mostly tracked higher post the Asia close on Thursday, although ran out of steam just above 7.2270 during US trade. We track near 7.2220 in early Friday dealings, having lost a modest 0.07% in Thursday trade (in CNH terms). USD/CNY finished up at 7.2214, also slightly weaker in yuan terms.

  • Firmer USD/CNH levels were supported by the higher US backdrop, as cautious Fed commentary saw rate cut expectations pared. Yesterday's USD/CNY fixing also helped curb downside momentum in the pair, as we remain above 7.1000 for now on the fixing outcome, which was little changed despite a sharp USD pull back.
  • Levels wise for USD/CNH, recent lows rest near 7.2040, which is just above the 200-day EMA. Recent highs rest close to 7.2470.
  • On the data front today we have April house price figures. April activity figures are also due. IP is expected at 5.5% y/y (4.5% prior). Retail sales is forecast at 3.7% y/y (3.1% prior). Fixed asset investment and property investment are expected around March levels. The unemployment rate is projected unchanged at 5.2%.
  • Note as well headlines crossed late yesterday of a meeting today between key stakeholders in terms of China's property sector. Caixin notes new policy measures to aid the sector could be announced today (see this link for more details).
  • We also have the 30yr debt auction today, the first part of China's ultra long bond issuance plans to aid the growth outlook.
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USD/CNH mostly tracked higher post the Asia close on Thursday, although ran out of steam just above 7.2270 during US trade. We track near 7.2220 in early Friday dealings, having lost a modest 0.07% in Thursday trade (in CNH terms). USD/CNY finished up at 7.2214, also slightly weaker in yuan terms.

  • Firmer USD/CNH levels were supported by the higher US backdrop, as cautious Fed commentary saw rate cut expectations pared. Yesterday's USD/CNY fixing also helped curb downside momentum in the pair, as we remain above 7.1000 for now on the fixing outcome, which was little changed despite a sharp USD pull back.
  • Levels wise for USD/CNH, recent lows rest near 7.2040, which is just above the 200-day EMA. Recent highs rest close to 7.2470.
  • On the data front today we have April house price figures. April activity figures are also due. IP is expected at 5.5% y/y (4.5% prior). Retail sales is forecast at 3.7% y/y (3.1% prior). Fixed asset investment and property investment are expected around March levels. The unemployment rate is projected unchanged at 5.2%.
  • Note as well headlines crossed late yesterday of a meeting today between key stakeholders in terms of China's property sector. Caixin notes new policy measures to aid the sector could be announced today (see this link for more details).
  • We also have the 30yr debt auction today, the first part of China's ultra long bond issuance plans to aid the growth outlook.