MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI: US NOV CPI 0.3%, CORE 0.3%; CPI Y/Y 2.7%, CORE Y/Y 3.3%

MNI: US NOV SUPERCORE CPI (CORE SERVICES EX-HOUSING) 0.342%

MNI: US NOV CPI UNROUNDED M/M 0.313%, CORE 0.308%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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USD/CNH Back Close To 7.2000, LPRs Expected To Be Held Steady Today

CNH

USD/CNH tested sub 7.2000 late in Friday Asia Pac trade before sentiment stabilized. We couldn't sustain moves back above 7.2100 and we track near 7.2040 in early trade today. CNH gained 0.17% on Friday's session, while USD/CNY finished up at 7.1934, unable to break above 7.2000. The CNY NEER (J.P. Morgan index) finished down slightly on Friday at 123.835, off nearly 0.10%, but we remain within recent ranges for the index.

  • Some focus late on Friday was on CNH forward points, with TN moving back into positive territory (0.63 last) and thereby raising the cost to short CNH.
  • Increased resistance against yuan depreciation may be in play. BBG has noted state banks have been leaning against USD strength through parts of last week.
  • he 20-day EMA is back near 7.1850 on the downside for USD/CNH.
  • Concerns around the economic backdrop did the rounds again on Friday. A RTRS sources piece noted that “China has instructed heavily indebted local governments to delay or halt some state-funded infrastructure projects, as Beijing struggles to contain debt risks even as it tries to stimulate the economy.”
  • Local equity sentiment finished the week slightly weaker. The CSI 300 down 0.15%. The Golden Dragon index lost 0.60% in Friday US trade.
  • Today we have the 5yr and 1yr LPRs, no changes are expected (5yr currently at 4.20%, 1yr 3.45%). Headlines did the rounds late on Friday that the PBoC would adjust the LPR quotation banks, which could be applied to today's fixing LPR fixing.
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