News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • 🇮🇹 Business Confidence (JUN) Actual: 114.8 Expected: 112 Previous: 110.9 https://www.dailyfx.com/economic-calendar#2021-06-25
  • 🇮🇹 Consumer Confidence (JUN) Actual: 115.1 Expected: 112 Previous: 110.6 https://www.dailyfx.com/economic-calendar#2021-06-25
  • Hang Seng Tech Index Attempts to Break key Resistance - #HSTECH chart https://t.co/zyCoXqgoVz
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 89.84%, while traders in GBP/JPY are at opposite extremes with 68.93%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/jaai5GlT9Q
  • Heads Up:🇮🇹 Business Confidence (JUN) due at 08:00 GMT (15min) Expected: 112 Previous: 110.2 https://www.dailyfx.com/economic-calendar#2021-06-25
  • Heads Up:🇮🇹 Consumer Confidence (JUN) due at 08:00 GMT (15min) Expected: 112 Previous: 110.6 https://www.dailyfx.com/economic-calendar#2021-06-25
  • Heads Up:🇪🇺 European Council Meeting due at 08:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-06-25
  • - Will implement macroprudential measures to fight with inflation if needed
  • Turkish Finance Minister - Turkey to grow more than government forecast in 2021, expecting around 20% growth in Q2 - Central Bank stance on price stability is important
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/txBC7G5EcY
China's Market News: Yuan Index Drops, Onshore Borrowing Cost Rises

China's Market News: Yuan Index Drops, Onshore Borrowing Cost Rises

Renee Mu, Currency Analyst

This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources.

- The CFETS Yuan Index drops -0.17% against a basket of currencies on last Friday on a weekly basis.

- The NDRC introduced a series of Public-Private-Partnership projects in the effort of meeting private firms’ need.

- The Chinese government has set up two funds for state-owned enterprises in trouble to reform.

To receive reports from this analyst,sign up for Renee Mu’ distribution list.

Yuan Rates

- The CFETS Yuan Index, a major measure of the Yuan against a currency basket, dropped -0.17% to 94.11 last Friday from a week ago. The other two Yuan indexes show mixed moves: the BIS Yuan Index fell -0.30% to 94.74 while the SDR Yuan Index rose +0.33% to 95.11.

In a longer time frame, all three Yuan indexes are on downward trends. This indicates Yuan’s weakness against a basket of currencies.

China's Market News: Yuan Index Drops, Onshore Borrowing Cost Rises

Data downloaded from Bloomberg; chart prepared by Renee Mu.

The PBOC set the Yuan’s reference rate slightly weaker against the U.S. Dollar on Monday from the previous trading day, down -74 pips to 6.6744. With the Yuan’s official inclusion in the SDR basket in less than a week, Yuan pairs are likely to be stable to prepare for a smooth entry.

Yuan’s 1-week onshore borrowing cost in Shanghai interbank market jumped 3.30 basis points to 2.4390% on Monday, following a net withdrawal of 245.0 billion Yuan cash by the PBOC. This is the highest level for the 1-week SHIBOR since February. As China’s onshore market will close from October 1st to 7th for the National Day holiday, the Central Bank has suspended the issuance of 7-day reverse repos and used 14-day and 28-day reverse repos instead, which likely contributed to the hike in the 1-week SHIBOR. The overnight SHIBOR was little changed, at 2.1640% on Monday, indicating no immediate shortage in Yuan liquidity.

China's Market News: Yuan Index Drops, Onshore Borrowing Cost Rises

Data downloaded from Bloomberg; chart prepared by Renee Mu.

The offshore overnight Yuan’s borrowing cost in Hong Kong increased to 2.5100% on Monday from 1.5505% prior; despite the rise, the benchmark rate remained within a normal range, compared to a 23.6830% rate a week ago.

Market News

Hexun News: Chinese leading online media of financial news.

- The National Development and Reform Commission (NDRC) released 1233 new Public-Private-Partnership (PPP) projects that private companies are encouraged to participate in; the total value of the projects are more than 2.14 trillion Yuan. Many Chinese private firms are holding excess cash but in short of investment opportunities. Therefore, the NDRC has been promoting PPP projects as one of the major solutions. In terms of industries of the newly promoted projects, transportation projects take up nearly 70%.

The move is also seen as part of China's fiscal stimulus. Amid the increasing risk of asset price bubbles in the housing sector, the PBOC is less likely to introduce a loose monetary policy. As a result, China may have to rely more on fiscal policy in the effort of supporting the economy, such as through PPP projects.

Sina News: China’s most important online media source, similar to CNN in the US. They also own a Chinese version of Twitter, called Weibo, with around 200 million active users monthly.

- The State-owned Assets Supervision and Administration Commission (SASAC) launched a 350 billion Yuan fund on September 25th, which is designated to help state-owned enterprises (SOEs) to conduct reforms. Another government-led fund for SOE’s reforms was introduced last month, worth 200 billion Yuan. Amid weak global demand and excess capacity, many Chinese SOEs are struggling to survive in the ‘economic winter’. The two government-led funds are expected to help SOEs to conduct industrial upgrading and promote mergers and acquisitions among SOEs.

SASAC is a state agency that manages state-owned assets, including the SOEs. The NDRC, on the other hand, focuses more on national strategies and plans rather than on individual firms.

-To receive reports from this analyst,sign up for Renee Mu’ distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES