MNI China Daily Summary: Monday, April 29

MNI BRIEF: China Pushes Back Against Japan's Semiconductor Threat

MNI: China CFETS Yuan Index Down 0.33% In Week of Apr 26

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

MNI: PBOC Sets Yuan Parity Higher At 7.1066 Mon; -4.49% Y/Y

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

Sequential SA Services CPI Estimated To Have Slowed Markedly

April Inflation: Services Decelerate, Core Goods Likely Soft

MNI: GERMANY APR CPI +2.2% Y/Y

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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USD Index Sheds 0.4% As Powell Acknowledges Inflation Progress

FOREX
  • Despite some volatile two-way flow following remarks from Fed Chair Powell on Thursday, the USD index has consolidated losses on the day, declining 0.50% as we approach the APAC crossover. The downward bias has been emphasised by Powell’s remarks on the progress of inflation that has prompted another steepening move for the US yield curve.
  • Leading the gains in G10 are the Euro and the Swiss Franc as the Japanese Yen continues to be stuck between the attractive carry profile and the fear of verbal/actual intervention from the Ministry of Finance.
  • EURUSD saw some decent upward momentum following the Powell release, coinciding with a break of multiple weekly highs at 1.0595 which prompted a quick rally to highs of 1.0616. Price has since drifted back below the 1.06 handle, however looks set to register a 0.5% advance on the session. On the upside, a break of 1.0640, the Oct 12 high, would signal scope for a stronger technical correction.
  • Despite a moderate bounce alongside the greenback weakness, NZDUSD is underperforming once again, following on from the fresh 2023 lows made on Wednesday.
  • In sympathy with its Antipodean counterpart, and weakness for equities, AUDUSD is also slightly softer on the day. Furthermore, softer labour market data and disappointing Chinese home sales data worked against the currency. The technical backdrop remains bearish on the currency, with short-term gains still considered corrective. Attention is on $0.6286, the Oct 3/13 low. A clear break of this support would confirm a resumption of the trend and open 0.6215, a Fibonacci projection.
  • China’s reference lending rate will likely remain unchanged on Friday, after Q3’s strong-than-expected economic performance and as the yuan passes through a period of weakness, economists told MNI. Elsewhere, the RBNZ Statement of Intent will be published before retail sales data for both the UK and Canada.
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