MNI China Daily Summary: Friday, February 7

MNI: GERMANY DEC INDUSTRIAL PRODUCTION -2.4% M/M

MNI: GERMANY DEC TRADE BALANCE E20.7BLN

MNI BRIEF: Tariffs Force CBRT To Hike 2025 Inflation Forecast

MNI: PBOC Net Drains CNY100.3 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Higher At 7.1699 Fri; -1.35% Y/Y

MNI JAPAN DEC HOUSEHOLD SPENDING +2.7% Y/Y; NOV -0.4%

EZ/UK Bond Supply Calendar: Belgium ORI Facility on Friday

US EIA:NAT GAS STORAGE -174 BCF TO 2,397 BCF JAN 31 WK

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

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

GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

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CNH: USD/CNH Rallies Near Record Highs Following Tariff News, Caixin PMI Today

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USD/CNH sits off earlier highs. The pair got to 7.3734 in early Monday dealings (post weekend tariff news) but sits back near 7.3600 in latest trade. This is still around 0.50% weaker in CNH terms versus end Friday levels. Record intra-session highs in USD/CNH rest at 7.3749 (from 2022) per BBG, so we stopped just short of a test of this level. 

  • A reminder that onshore markets remain closed until Wednesday, when they return from the LNY break. Hong Kong markets return today so we should see some improvement in liquidity from that standpoint.
  • Focus today will be on any China retaliation measures to Trump's 10% tariff announcement from the weekend. China officials vowed action, with the Commerce Ministry stating a lawsuit would be filed with the WTO. Broader measures though weren't specified.
  • Higher USD/CNY levels would expected to counteract the tariff response, when onshore markets return on Wednesday. The close before the LNY break was 7.2446, but recent highs rest close to 7.3330
  • Today we do have the January Caixin manufacturing PMI out. The market consensus is for a 50.6 print, versus 50.5 prior. 
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USD/CNH sits off earlier highs. The pair got to 7.3734 in early Monday dealings (post weekend tariff news) but sits back near 7.3600 in latest trade. This is still around 0.50% weaker in CNH terms versus end Friday levels. Record intra-session highs in USD/CNH rest at 7.3749 (from 2022) per BBG, so we stopped just short of a test of this level. 

  • A reminder that onshore markets remain closed until Wednesday, when they return from the LNY break. Hong Kong markets return today so we should see some improvement in liquidity from that standpoint.
  • Focus today will be on any China retaliation measures to Trump's 10% tariff announcement from the weekend. China officials vowed action, with the Commerce Ministry stating a lawsuit would be filed with the WTO. Broader measures though weren't specified.
  • Higher USD/CNY levels would expected to counteract the tariff response, when onshore markets return on Wednesday. The close before the LNY break was 7.2446, but recent highs rest close to 7.3330
  • Today we do have the January Caixin manufacturing PMI out. The market consensus is for a 50.6 print, versus 50.5 prior.