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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 tracked familiar ranges post the Asia close. Dips in the pair were supported, as USD momentum stayed positive against the likes of EUR and JPY. CNH continued to outperform against JPY though, rallying back into the 19.80/90 zone. USD/CNH is just above 6.7600 currently, with dips to the low 6.7500 region supported in recent sessions.
- Geopolitical tensions will remain the near-term focus, with the market in wait and see mode around further escalation risks, particularly with military exercises taking place around Taiwan over the next few days.
- Locally, onshore media is pointing to a 11% rise in infrastructure investment in 2022, with Q3 expected to see a strong rebound. This is likely to be a key part of the domestic recovery and may aid infrastructure related stocks today.
- Yesterday, onshore equities finished down close to 1%. The recent rebound in the Shanghai Property sub-index has also rolled over, with the index falling for the past 6 sessions. We are now back to fresh lows since mid-March.
- We continue to see China equities underperform the rest of the world, see the chart below. The CNY NEER remains off its highs, but has stabilized since the start of this week.
- On the covid front, a small Chinese city, Yiwu, plans mass testing after a recent flare up.
- In terms of data, nothing is on the calendar today, with BoP Q2 current account figures tomorrow, but this is unlikely to move market sentiment. Greater focus will be on trade figures out on Sunday for July.
Fig 1: China Equities Continue To Underperform, CNY NEER Stabilizes Somewhat
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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