CNY: USD/CNY Rises Post LNY Break, USD/CNH Edges Higher
USD/CNY spot has re-opened higher, the pair last tracking above 7.2800. this fits with the slightly higher USD index levels we've had since the LNY break (onshore markets have been closed since Jan 27). Pre LNY lows in spot were at 7.2376, which also coincided with the simple 100-day MA.
- USD/CNH has gravitated higher, but is well within recent ranges, the pair last close to 7.2930, slightly weaker in CNH terms for the session. The maintains a modestly positive USD/CNH-USD/CNY basis.
- Earlier we had the USD/CNY fixing which steady relative to pre LNY outcomes. The fixing error widened though, suggesting continued onshore push back against yuan depreciation pressures.
- Data in terms of the Caixin services PMI has also just printed, missing estimates at 51.0 (52.4 was the forecast and 52.2 prior). This continues the Jan run of poorer PMI prints, suggesting some loss of economic momentum, although interpretation is tricky given LNY timing at the end of the month.
- BBG notes home sales resumed falling in Jan, but that box office subscriptions were at t record high.
- Also not helping yuan sentiment will be the lack of equity upside , with onshore markets initially opening higher before turning lower. HK markets are also weaker, as markets digest economic data/trade tariffs etc.
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AUD: A$ Stronger But Off Intraday Highs
Aussie is stronger today helped by better risk appetite and softer CNH trends. AUDUSD is up 0.2% to 0.6226, off the intraday high of 0.6240. It fell to 0.6208 early in today’s trading. The USD index is off its low to be little changed.
- With the better risk tone, AUDNZD is up only 0.1% to 1.1082. However, AUDJPY is 0.4% higher at 98.17, close to the intraday high of 98.30. AUDEUR is up 0.2% to 0.6040 and AUDGBP +0.1% to 0.5008 after falling briefly below 0.5000 early in the session.
- The final December S&P Global composite PMI was revised up 0.3pp to 50.2, the third straight month at this level and signalling only slight growth in activity which is being driven by the services sector. The services PMI was revised up 0.4pp to 50.8 to be 0.3pp higher than November.
- Equities are mixed with the ASX up 0.1% and Hang Seng/CSI flat but Nikkei down 1.1% as it catches up after being closed several days. The S&P e-mini is 0.1% lower. Oil prices continue to climb with WTI +0.3% to $74.18/bbl. Copper is up 0.2% and iron ore has given up gains to be back around $99/t.
- Later the Fed’s Cook speaks. US & European December services/composite PMIs and preliminary December German CPI data are released.
MNI: CHINA PBOC CONDUCTS CNY14.1 BLN VIA 7-DAY REVERSE REPOS MON
- CHINA PBOC CONDUCTS CNY14.1 BLN VIA 7-DAY REVERSE REPOS MON
CANADA: Local Media Report Trudeau Will Resign This Week
Headlines have crossed from the Globe and Mail that Canadian PM Trudeau will resign this week. The reports note that the resignation could happen later today, but that it is expected to happen before a national caucus meeting on Wednesday (see this BBG link for more details).
