VIEW: Goldman Sachs note that China's....>

CHINA YUAN: VIEW: Goldman Sachs note that China's domestic macro picture looks

fairly encouraging, and besides a recent flare-up in Beijing, the country has

largely kept the COVID-19 outbreak under control. We have even seen a modest

normalization in interest rates in recent weeks, possibly indicating

policymakers are more confident in the outlook. However, we remain concerned

about ongoing disputes between China & the U.S. in the run-up to the Nov

election, and are therefore reluctant to turn more positive on CNY at this

stage. First, the Hong Kong Security Law drew international backlash from a

number of countries. Second, the U.S. is also reportedly preparing to issue

sanctions against Chinese officials related to human rights abuses after

pressure from Congress. Third, there are several ongoing efforts to block

Chinese firms from raising capital in the U.S. Taken together, these efforts

could lead to further equity outflows from U.S. investors, offsetting the

positive impulse from higher domestic growth and rates."