People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.

  • USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
  • CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.
  • A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.

The previous close was 7.1659

PBOC injects 2bn yuan in open market operations (OMOs) via 7-day reverse repos (RRs) at an unchanged rate of 1.9%. The PBOC cut this yesterday from the previous rate of 2%. Later in the day the PBOC cut its SLF rates also.

  • 2bn yuan of RRs mature today
  • thus a net neutral on the day in OMOs

China's 10-year govt bond yield has dropped further to near the 2.6%, hitting 2.6025%. this is a new low since June of 2020, on the expectation of further monetary easing to come. A MLF rate cut is expected tomorrow and LPR next Tuesday.

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