RGI rose 1.2% m/m in November; trade settlement is a key driver, as 22% of China’s trade settled in RMB
• By end-2015, we expect the RGI to reach 2,500 and Renminbi deposits in Hong Kong to reach CNY 1.05tn
• Dim Sum issuance this year should be ...
CNY may weaken mildly near-term, despite the lack of a depreciating signal from the fix
• Tightness in both onshore and offshore liquidity likely to persist, keeping forward points elevated
• We close our short USD-CNH 6M DF position and look for ...
USD-CNY and USD-CNH spot has bounced off 6.14 and CNH forward points remain elevated
• Near-term CNY gains may be muted on mixed July data and broader USD gains
• Leveraged accounts should take profit on their short USD-CNH 6M DF positions...
USD-CNY fix retreated by 0.3% in just two days amid China-USD SED talks and June trade data
• USD-CNY NDF curve has extended steepening, with USD-CNH 6M NDF marginally higher than a week ago
• Leveraged accounts long USD-CNY 6M NDFs vs. short USD-...
• We add New York to our RGI, reflecting rising Renminbi payment flows and CNH FX turnover
• New York enjoys time-zone advantage, massive trade with China, and rising investor interest in the RMB
• We summarise the latest Renminbi developments in...
Top 3 data/events
• China – Manufacturing PMI is on a weakening trend
• Japan – Q2 Tankan survey is likely to show continued improvement
• NZD – Revised NZD-USD forecasts
• Market focus
• EM local markets are likely to consolidate near-ter...
USD-CNH forwards edge up on spot rebound and broad US dollar strength, favouring our USD long
• Retreat in CNY’s trade-weighted value on the JPY rebound moderates case for higher USD-CNY fixes
• Selling USD-CNY NDF 5M against our existing USD...
The dollar’s broad-based advance has triggered powerful gains in the CNY’s trade-weighted value
• China activity data remains lacklustre, undermining the case for further near-term CNY gains versus USD
• Long USD in USD-CNH 6M forward would benef...
• Broader US dollar strength may trigger a short-lived rebound in the PBoC’s USD-CNY daily fixes
• A shift in the demand-supply balance in the mainland FX market may lift USD-CNY spot
• Going forward, we look for opportunities to establish forward...
• SAFE created a new mechanism to regulate bank NOPs by linking bank FX LDR ratios with the NOP floor
• The aggregate necessary increase in NOP is estimated at USD 23bn, a relatively small amount in our view
• Stricter scrutiny of trade invoices ...
• USD-CNY demand/supply was heavily in favour of sales in Q1, but should be more balanced in Q2
• More balanced demand/supply and new SAFE rules increase the chance of band widening
• We see a 33% chance of CNY band widening before the July SED, o...
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