- Chinese state banks seen intervening to support the yuan - intervention to sell USD/yuan
- China mainland and Hong Kong stocks higher after Politburo stimulus pledge
- China promised more stimulus, PBOC strengthened CNY - yuan rising in early China trade
- PBOC sets USD/ CNY central rate at 7.1406 (vs. estimate at 7.2044)
- More pronounced volatility seen in the days ahead with G3 central bank "talk" to come
- Fed insider says the Bank is not yet ready to declare victory over inflation
- Rate cuts, tax cuts, fee reductions expected from China says state-sponsored finance media
- Australian weekly consumer confidence survey 75.2 (prior 72.6)
- Commerzbank's two factors that'll prompt a weaker yen if the BOJ holds steady policy
- South Korean Q2 GDP +0.6% q/q (expected +0.5%)
- (AAPL) Apple faces US$1 bn UK lawsuit by apps developers over app store fees
- On Monday China promised more stimulus. Another promise, or for real this time?
- BOJ is likely to consider raising their consumer inflation projection to around 2.5%
- No chance we’re having a soft landing, most pernicious Fed tightening since Volcker
- JP Morgan: US stock mkt concentration highest 60 years. Watch AI frenzy for selloff sign.
- BOJ meet this week. MUFG still expect YCC tweak but their confidence ebbing. Yen scenario.
- Trade ideas thread - Tuesday, 25 July 2023
- Major indices all close higher. Dow is up for the 11th consecutive day
- Forexlive Americas FX news wrap: PMIs highlight areas for concern
The G3 central bank meetings this week:
- Federal Open Market Committee (FOMC) on Wednesday, European Central Bank on Thursday, and the Bank of Japan on Friday
put a dampener on major FX volatility during the session.
The announcement from China’s Politburo promising more support for the Chinese economy provided a regional focus though. See the bullets above for more on the Politburo announcements (be aware details are basically non-existent still). In addition measures should include:
- addressing local debt risks through a comprehensive debt resolution plan
- putting job stability at a higher, strategic level
- real estate policy to be adjusted promptly, replacing the previous "not for speculation" rhetoric
Chinese property developer stocks in Hong Kong and on mainland exchanges rallied sharply. Chinese equity markets rallied more broadly also.
The yuan traded higher, helped along by another strong mid rate fixing from the People’s Bank of China (500+ points lower than the estimate for USD/CNY). The yuan also found bids from large Chinese state banks who were actively intervening to support the yuan by selling USD/CNY and USD/CNH.
China-proxy FX such as AUD and NZD also gained, though not nearly to the same extent as the yuan.
Asian equity markets:
Japan’s Nikkei 225 -0.3%
China’s Shanghai Composite +1.6%
Hong Kong’s Hang Seng +3.2%
South Korea’s KOSPI +0.1%
Australia’s S&P/ASX 200 +0.4%
