6 Mar 2015
USD/CNY bullish bias – BTMU
FXStreet (Barcelona) - The Research Team at Bank of Tokyo-Mitsubishi UFJ, retains their bullish bias on USD/CNY, supported by the positive view for Chinese headline CPI inflation.
Key Quotes
“Authorities have clearly been trying to calm spot the past two sessions, but DXY is rising and global disinflation won't go away soon.”
“If China's headline CPI inflation rebounds as we and markets expect, these will all exacerbate CNY REER strength, implying higher fixings could return. We retain our bullish lean.”
“Both PBOC Deputy Governor Yi Gang and advisor Chen Yulu said there was no urgent need to widen the trading band (which has also been our view), so upside is capped by the fix.”
“As February economic indicators roll in, we are watching if retail performance improves, an early indication of lower oil price stimulus. We are also thinking total social financing will exceed expectations as new bank lending is pushed by authorities, meaning possibly upside potential for fixed asset investment.”
“For the record, both CFLP and HSBC/Markit manufacturing PMIs rose in February, the latter noticeably.”
“USD/CNY – bullish bias – (6.2500-6.2850)”
Key Quotes
“Authorities have clearly been trying to calm spot the past two sessions, but DXY is rising and global disinflation won't go away soon.”
“If China's headline CPI inflation rebounds as we and markets expect, these will all exacerbate CNY REER strength, implying higher fixings could return. We retain our bullish lean.”
“Both PBOC Deputy Governor Yi Gang and advisor Chen Yulu said there was no urgent need to widen the trading band (which has also been our view), so upside is capped by the fix.”
“As February economic indicators roll in, we are watching if retail performance improves, an early indication of lower oil price stimulus. We are also thinking total social financing will exceed expectations as new bank lending is pushed by authorities, meaning possibly upside potential for fixed asset investment.”
“For the record, both CFLP and HSBC/Markit manufacturing PMIs rose in February, the latter noticeably.”
“USD/CNY – bullish bias – (6.2500-6.2850)”