MNI: Canada Has CAD2.9B Q1 Budget Deficit Vs Prior Surplus

CANADA Q2 ANNUALIZED GDP +2.1% VERSUS +1.7% EXPECTED

MNI China Daily Summary: Friday, Aug 30

MNI BRIEF: China Aug PMI Contracts For Fourth Straight Month

MNI: US JUL PERSONAL INCOME +0.3%; NOM PCE +0.5%

MNI BRIEF: PBOC Bought Net CNY100 Billion CGBs In August

MNI: BAKER HUGHES US RIG COUNT 583; OIL RIGS 483; GAS RIGS 95

EZ/UK Bond Supply Calendar: UK, ESM Syndis; AS, DE Due Tuesday

MNI Chicago Report™: 27% Have Contingency Plans Due to Adverse Weather

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

UK: Week Ahead

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

USD/CNH Slumps Under 7.1000 As Exporters Step Up Selling, Official PMIs Print Tomorrow

CNH
EM BulletFixed Income BulletsHomepagemarkets-real-timeBulletMarketsEmerging Market NewsForeign Exchange Bullets

USD/CNH got to lows just under 7.0850 post the Asia close on Thursday. This was just above earlier August lows (7.0838). We track slightly higher in early Friday dealings, last around 7.0920. Still, CNH was 0.54% firmer for Thursday's session, significantly outperforming broader USD index gains (DXY +0.28% etc). Spot USD/CNY finished up at 7.0970. The CFETS CNY tracker rose a modest 0.11% to 97.61 per BBG.

  • Bloomberg noted that exporters were reportedly strong USD sellers in the offshore market yesterday (see this link). This is something we hinted could be driving yesterday's sharp move lower in the pair, given lack of other macro drivers.
  • The focus will now be on such follow up flows, with a break sub 7.1000 potentially driving more exporters to convert FX receipts back into yuan. Barclays suggests we could see as much as $200bn in conversion.
  • The USD/CNY fix will also be in focus, to see any degree of pushback from the authorities in terms of the fixing bias on this recent yuan appreciation.
  • The official PMIs print tomorrow for August. The market expects the manufacturing PMI to edge up to 49.5 from 49.4, services to be at 50.1, versus 50.2 prior.
  • Cross asset sentiment remains broadly negative from an equity market standpoint, with on-going growth headwinds a factor. The PBoC Governor stated yesterday the central bank will study more ways to boost the economy (see this link).
234 words

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.

USD/CNH got to lows just under 7.0850 post the Asia close on Thursday. This was just above earlier August lows (7.0838). We track slightly higher in early Friday dealings, last around 7.0920. Still, CNH was 0.54% firmer for Thursday's session, significantly outperforming broader USD index gains (DXY +0.28% etc). Spot USD/CNY finished up at 7.0970. The CFETS CNY tracker rose a modest 0.11% to 97.61 per BBG.

  • Bloomberg noted that exporters were reportedly strong USD sellers in the offshore market yesterday (see this link). This is something we hinted could be driving yesterday's sharp move lower in the pair, given lack of other macro drivers.
  • The focus will now be on such follow up flows, with a break sub 7.1000 potentially driving more exporters to convert FX receipts back into yuan. Barclays suggests we could see as much as $200bn in conversion.
  • The USD/CNY fix will also be in focus, to see any degree of pushback from the authorities in terms of the fixing bias on this recent yuan appreciation.
  • The official PMIs print tomorrow for August. The market expects the manufacturing PMI to edge up to 49.5 from 49.4, services to be at 50.1, versus 50.2 prior.
  • Cross asset sentiment remains broadly negative from an equity market standpoint, with on-going growth headwinds a factor. The PBoC Governor stated yesterday the central bank will study more ways to boost the economy (see this link).