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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 pulled back sharply after making fresh highs late in Asia Pac trade. The pair got near 7.1400, before pulling back sub 7.1050 by the NY session. Like elsewhere, the CNH benefited from softer USD conditions, amid lower yields/speculation the Fed will pause in June. For Thursday, CNH gained 0.21%, while USD/CNY finished sub 7.1000. This still leaves the CNY NEER lower at 122.88, -0.27% (J.P. Morgan index), which is fresh lows back to Sep 2021 (see the chart below).
- CNH's fortunes may largely rest with broader USD/yield trends in the near term, with yesterday's better than expected Caixin PMI print providing only fleeting support to the currency.
- The MNI policy team interviewed Chen Zhongtao, vice director at China Logistics Information Center (CLIC), who stated Chinese manufacturing risks further declines in the second half without continued fiscal and monetary support, after worse-than-expected PMI data revealed the highest proportion of companies expressing concerns over demand in the survey’s history (see this link for more details).
- To recap, local equities finished away from highs, although the CSI 300 remains above the 3800 level. In US trade on Thursday the Golden Dragon index rebounded strongly though, up over 4%, moving the index back above the 6200 level.
- Onshore bond yields are mostly tracking lower at the front end, the 2yr last around 2.15%, while the 10yr continue to hold above 2.70%.
- The local data calendar is empty until next Mon, when the Caixin services PMI prints.
Fig 1: J.P. Morgan CNY NEER At Fresh Lows Back To Sep 2021
Source: J.P. Morgan/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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