MNI BOK WATCH: More Evidence Needed To Cut Rates, Says Rhee

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

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS THURS

MNI: PBOC Sets Yuan Parity Lower At 7.1339 Thurs; -1.06% Y/Y

CHINA SETS YUAN CENTRAL PARITY AT 7.1339 THURS VS 7.1342

MNI BRIEF: Bank of Korea Keeps Policy Rate At 3.50%

CPI Details Show Disinflation Tapering Off for High-Rate Items (2/2)

CPI Details Show Disinflation Tapering Off for High-Rate Items (1/2)

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

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

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Yuan Weakens To May Lows, US-CH Yield Differentials Tracking Higher

CNH
EM BulletFixed Income BulletsHomepageBulletMarketsEmerging Market NewsForeign Exchange Bullets

USD/CNH rose above 7.2500 post the Asia close on Wednesday, amid broad USD gains. We got to around 7.2550, which was at intra-session highs from the start of this month. Spot USD/CNY finished up at 7.2413, which was the highest close since late April.

  • USD/CNH is above all key EMAs, the nearest being the 20-day near 7.2390. April 25 highs rested near 7.2740 in terms of a potential upside target.
  • The broader backdrop supports a higher USD/CNY fixing today, although we haven't been above the 7.1100 handle since January of this year for the fix. Yesterday's upside ceiling in USD/CNY spot was near 7.2500, but we didn't get close to that level during the session.
  • Elsewhere, rate differentials have ticked back up in favour of the USD, particularly at the front end, the 2yr spread last above +305bps. This is tracking back towards late April cyclical highs. The FOMC Mins released in Wed US trade didn't shift US yields greatly, but remained consistent with the recent steady drumbeat of Fed commentary around caution on inflation/rate cut timing.
  • Our China policy team noted late yesterday that the chances of a RRR cut has risen with the pick up in government debt issuance (see this link for more details).
  • On the data front today we have April Swift Global Payments data.
218 words

To read the full story

Close

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.

USD/CNH rose above 7.2500 post the Asia close on Wednesday, amid broad USD gains. We got to around 7.2550, which was at intra-session highs from the start of this month. Spot USD/CNY finished up at 7.2413, which was the highest close since late April.

  • USD/CNH is above all key EMAs, the nearest being the 20-day near 7.2390. April 25 highs rested near 7.2740 in terms of a potential upside target.
  • The broader backdrop supports a higher USD/CNY fixing today, although we haven't been above the 7.1100 handle since January of this year for the fix. Yesterday's upside ceiling in USD/CNY spot was near 7.2500, but we didn't get close to that level during the session.
  • Elsewhere, rate differentials have ticked back up in favour of the USD, particularly at the front end, the 2yr spread last above +305bps. This is tracking back towards late April cyclical highs. The FOMC Mins released in Wed US trade didn't shift US yields greatly, but remained consistent with the recent steady drumbeat of Fed commentary around caution on inflation/rate cut timing.
  • Our China policy team noted late yesterday that the chances of a RRR cut has risen with the pick up in government debt issuance (see this link for more details).
  • On the data front today we have April Swift Global Payments data.