Free Trial

USD/CNH Range Bound, LPRs To Be Cut Today

CNH

USD/CNH couldn't get back sub the 7.3000 level post the Asia close on Friday, while moves in the 7.3100/7.3200 region drew selling interest. This kept ranges fairly tight overall, with the pair ending the Friday session near 7.3065, little changed versus Thursday closing levels. USD/CNY ended Friday at 7.2845. The CNY NEER (J.P. Morgan index) firmed a touch to 121.50.

  • The weekend news flow remained dominated by local government debt concerns and the property sector. This followed a meeting at the end of last week between the PBoC and other regulators, which also called on banks to boost lending to support the economy (see this link and here as well).
  • Caixin stated some local governments will able to sell 1.5 trillion yuan of special financing bonds to help repay debt (see this link ).
  • Today on the data front we have the 5-yr and 1-yr LPR decisions out. Both rates are expected to be cut by 15bps as per the consensus. This would take the 5yr to 4.05% and the 1yr to 3.40%.
  • Focus is also likely to be on the equity backdrop. The Golden Dragon index lost 3.48% in US trade on Friday (down ~7% for the week). To recap, the CSI 300 lost 1.23% on Friday, to close under the 3800 level.

To read the full story

Close

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.