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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
Like elsewhere, USD/CNH spent most of the post Asia close tracking higher. By late NY trade the pair had breached the 7.3400 handle. We currently track around 7.3365, leaving CNH down by 0.17% for Wednesday's session. The focus remains on 2022 highs for the pair. The wedge with onshore spot remains wide, see the chart below. USD/CNY closed at 7.2985, not breaching the 7.3000 handle yesterday. The CNY NEER (J.P. Morgan index) eased to 121.21, down -0.12%.
- USD/CNH vols remain below 2023 highs, the 1 month unable to move above the 7% handle. In the risk reversal space, the trend is firmer (last 0.53), but we are still below mid May highs near 0.90.
- Bloomberg reported that State banks were USD sellers in both the onshore and offshore spot markets, although such flows were reportedly not large. Liquidity has also tightened in the offshore CNH market.
- The local data calendar just has July FDI data on tap between now and the end of the week.
- In the equity space, to recap the CSI 300 ended down 0.73%, with the index closing near the 3800 level, which has been an important support point in recent months.
- Bloomberg reported late yesterday that the authorities have asked some funds to avoid net equity sales this week (see this link) The Golden Dragon index fell a further 1.64% in US trade on Wednesday.
Fig 1: USD/CNH - USD/CNY Spot
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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