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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
The CNY fix printed slightly stronger than expected. The market expected the USD/CNY fix at 6.7493, while the actual came in at 6.7487.
- Once again today's fix delivered only a modest surprise, -6pips in USD/CNY terms. This contrasts with yesterday's -15pip surprise. For the week, the cumulative downside surprise is a very modest -11pips.
- This contrasts with last week's cumulative -174pips in downside surprises. The rolling 5 day sum of the USD/CNY fixing error term troughed at -186pips back on May 9th, see the chart below.
- Hence, on a short term basis, we are almost back to neutral from a fixing bias standpoint. In this sense the authorities have not been trying to encourage further USD/CNY weakness this past week, at least beyond the broader USD trend.
- The market reaction in USD/CNH was muted post the fix. We did rise above 6.7400 after the 5-yr LPR cut was announced (4.45% versus 4.60% previously). However, we are now back to 6.7350.
Fig 1: CNY Fixing Bias Almost Back to Neutral - 5 Day Rolling Sum Of Fixing Error
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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