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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.
CNH
Dips back towards 7.1700 remain supported in USD/CNH. Late in NY trade the pair got to 7.1970, before edging back down to 7.1930, which is where we currently track. This left CNH 0.20% weaker for Tuesday's session, slightly underperforming broader USD trends. USD/CNY ended the session at 7.1864, while the CNY NEER (J.P. Morgan index) lost a further 0.21% to 119.54.
- China's data calendar is empty, although we may get FDI figures over the next few days. Tomorrow delivers the 1yr and 5yr LPR decisions, with no changes expected.
- BofA sees risks of the yuan sliding to 7.40 by end Q3 of this year. Policy stimulus will only boost data momentum with a lag the bank states (see this link for more details).
- Elsewhere, China onshore equities closed modestly lower yesterday (CSI 300 off 0.32%), although consumer discretionary stocks climbed as the authorities unveiled measures to boost consumption. The other focus point is renewed signs of property developer stress. The Hang Seng property index fell 2.47% yesterday and is back close to YTD lows. Onshore property equity indices were more resilient though.
- We are back towards lows from November last year in terms of China equity performance relative to the rest of the world, see the chart below, with USD/CNH (inverted), the other line on the chart.
Fig 1: China Versus Rest Of The World Equity Ration & USD/CNH (Inverted)
Source: MNI - Market News/Bloomberg
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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