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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.
CNH
USD/CNH spent the post Asia close tracking familiar ranges. We couldn't get above 6.7600, but dips sub 6.7500 were supported. We currently track around the 6.7570 level. The focus today is on the Jan PMIs, which are expected to show marked improvement.
- Both PMIs are forecast to jump sharply, particularly the services index (back to 52.0 from 41.6), see this link for more details.
- Elsewhere the China Dragon Index saw a sharp pull back in US trade, down 4.0%. Yesterday onshore equities rose, but the CSI 300 ended up 0.47% after opening +2% higher.
- Northbound stock connect flows were 18.6bn yuan, bringing inflows for the past month to 138.7bn yuan. This is very elevated from an historical stand point but offshore investors were coming from an underweight position late in 2022.
- In any case CNH gains have been somewhat less correlated with inflows over the past few weeks, although this obviously includes the LNY period, see the chart below.
Fig 1: CNH/USD Changes Versus Northbound Equity Flows
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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