MNI China Daily Summary: Thursday, April 18

MNI BRIEF: M2 Growth To Slow On Weak Demand - PBOC's Zou

MNI BRIEF: PBOC To Watch CNY Moves Closely - Vice Governor Zhu

MNI BRIEF: China Aims To Digitalise 70% Of Firms By 2025

MNI BRIEF: Q1 Cross Border Activity Up 117.8% - Ministry

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

MNI UK Inflation and Labour Market Insight: April 2024 Release

MNI: EUROZONE FEB CONSTRUCTION OUTPUT +1.8% M/M, -0.4% Y/Y

Q1 Industry Survey Suggests H1 Growth Tailwind

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 Unchanged, Higher Yields Place Pressure On JPY

FOREX
  • Pressure on the front-end of the US yield curve kept the USD underpinned on Tuesday. Despite the initial and very volatile spin-cycle following the US inflation data, the greenback is trading on a surer footing approaching the end of the European session. The USD index remains close to unchanged approaching the APAC crossover, claiming back early pre-data declines.
  • Some weakness in equities acted as an additional USD tailwind in the aftermath of the data although markets have stabilised in late US trade amid a plethora of Fed speakers. NZDUSD (-0.33%) continues to be one of the weakest pairs in G10 following inflation expectations data overnight. 2y inflation is seen at 3.30% for Q1, down from 3.62% late last year - feeding into the view that domestic inflation may have peaked for now.
  • The higher US yields are naturally weighing on the Japanese Yen and USDJPY (+0.52%) is currently consolidating above 133. As highlighted, a sustained break of the 50-day EMA (intersects today at 132.71) is required to suggest scope for an extension higher that would target 134.77 on the topside, the Jan 6 high.
  • In EURUSD, prices remains above support at 1.0674, the 50-day EMA, for now. This represents a key short-term level and a clear break of the average would instead strengthen the bearish cycle and initially expose 1.0634, the Jan 9 low.
  • With cross/JPY trading with an upward bias and extending yesterday’s supportive price action, attention for EURJPY is on 142.99, the Feb 06 high, where a break would confirm a continuation of the recovery that started on Jan 3.
  • The technical outlook remains bullish and resistance levels/targets above include 144.53, the 76.4% retracement of the Dec 15 - Jan 3 bear leg and 145.83, High Dec 20.
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