MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI: US MBA: MARKET COMPOSITE +5.4% SA THRU DEC 06 WK

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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USD/CNH Touches 6.9100 Before Retracing, LPRs Expected To Remain On Hold

CNH

USD/CNH got to fresh highs post the Aisa close on Wednesday. The pair got to the 6.9100 handle, just below late March highs, before pulling back. CNH lost 0.18% for the session. We currently track around the 6.8950 region, little changed in early trading, despite a supportive USD backdrop against the majors. The CNY NEER was flat at 125.28 for Wednesday (J.P. Morgan Index).

  • Coming up today is the 5yr and 1yr LPR outcomes. No change is expected in either rate (5yr currently at 4.30%, 1yr at 3.65%).
  • Like other pairs, USD/CNH is being biased higher by the firmer US yield backdrop, although it's beta with respect to the moves is not as strong as it was in 2022.
  • Still, intra-day moves with dollar indices remains fairly strong for USD/CNH.
  • 1 month USD/CNH implied vol has edged a little higher, but is not too far off recent lows sub 5% (last 5.22%). The 1 month risk reversal has also firmed a touch, last at 0.625.
  • Note in the US on Thursday, US Treasurer Secretary Yellen will deliver a speech on US-China economic ties.
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