CREDIT MACRO: List of Changes for Markit CDX.NA.IG.42

(MNI) London - Frankfurter Allgemeine Zeitung (FAZ) reports that Chancellor Olaf Scholz is set to visit China on 15-16 April, according to an invite set to business reps from the Asia-Pacific Committee of German Business. Scholz's trip will mark his first to China since Nov 2022, when he met with President Xi Jinping in Beijing. During that visit Reuters reports that Scholz "pressed Xi to prevail on Russia to end its invasion of Ukraine, saying Beijing had a responsibility as a major power to do so."

• The announcement of Scholz's visit comes as he prepares to travel to Washington, D.C., from 8-9 Feb for talks with President Joe Biden at the White House. The focus of talks is likely to be on the security situation in the Middle East, and the war in Ukraine.
• Scholz's visit could come as part of an effort to repair business relations with China that have come under strain recently. Indeed, neither Finance Minister Christian Lindner nor Economy Minister Robert Habeck have yet visited China, with the former being disinvited at short notice in May 2023.
• In recent weeks a number of headlines have appeared claiming that the German gov't is encouraging firms to 'de-risk' from China, while a survet seen by Reuters claimed that "The proportion of German firms exiting the Chinese market or considering doing so has more than doubled to 9% in the past four years"

Goldman Sachs note that “the CNY depreciated against the USD in January, despite some oscillations amidst different announcements of policy support. The DXY rose notably from the late December lows, primarily on solid employment reports and hawkish comments from Fed officials. CNY shorts built up in January on attractive carry returns.”

• “As policymakers actively managed the currency, investors have expressed growing interest in 1) carry trades of CNY shorts against high yielders such as INR, and 2) trade ideas related to active currency management (also attractive carry profiles), such as CNH/CNY basis wideners, pay CNH CCS vs. NDIRS, and pay USD/CNH forward points.”