Archives of “July 12, 2021” day

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PBOC sets USD/ CNY reference rate for today at 6.4785 (vs. Friday at 6.4755)

  
Analysis, Forex

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

    • USD/CNY is 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.

 

  • The previous close was 6.4791
  • Reuters surveyed estimate was 6.4739 (A rate that’s significantly stronger or weaker than expected is typically considered a signal from the PBOC).

 

PBOC injects 10bn yuan via 7-day reverse repos

  • 10bn RRs mature today
  • thus a net natural day for open market operations

Japan data – Core machinery orders for May rose m/m and y/y

  
Analysis, Economy

 Japan Core Machinery Orders for May up 7.8% m/m

  • expected 2.6%, prior 0.6% m/m
  • and +12.2% y/y vs. expected 6.3%, prior 6.5% y/y
  • Used as a capex indicator for Japan in the months ahead

Government says this indicator is showing signs of a pick-up and raises its assessment.

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ps. post delayed because I hadn’t realised it had not published …. here it s now 🙁

China state financial media say there could be more support for the economy incoming

  
Analysis, Economy

The China Securities Journal cites analysts:

  • H2 economic growth is expected to be not as quick as in H1 (2021)
  • government could increase policy support
The article comes after last week’s RRR cut which was not a ‘targeted’ cut (these tend to stimulate, by making lending less restrictive, specific parts of the economy such as lenders to SMEs &/or others) but rather a broad cut. Estimates of funds released range circa 1tln yuan.
What is immediately on the horizon is the People’s Bank of China’s monthly lending rates announcement, which comes on July 20. You’ll be familiar with these each month the 1- and 5-year loan prime rates. They are unchanged for 14 months.
Of course, interest rates cuts are only one possible tool.
The China Securities Journal cites analysts:

Dutch covid cases jump 800% in a week

  
  Analysis

Cases spike two weeks after dropping preventative measures

Cases spike two weeks after dropping preventative measures
On June 26, the Netherlands dropped pandemic restrictions, including masks, distancing and limits and replaced it with vaccine passport systems.
There’s some suspicions that this is driven by young people going to nightclubs. If that’s the case then hospitalizations shouldn’t follow re-opening.
The message from this is broader though and underscores the virulence of the delta variant globally.
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