• English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Vishnu Varathan, head of macro research for Asia (excluding Japan) at Mizuho Securities, said on April 3 that U.S. reciprocal tariffs may continue to be a source of economic headwinds. These tariffs may also "inadvertently intensify and increase vulnerability to adverse demand shocks." Varathan said: "Asia has been particularly hard hit, especially in Cambodia, Vietnam, Thailand and Indonesia." In addition, South Korea, Japan, India and the European Union have not been spared, while the United Kingdom, Australia and Singapore have been the least affected. Varathan added that, therefore, the pressure on Asian currencies, except for Japan, may continue.On April 3, the Wall Street Journal reported that German automaker Volkswagen will impose an "import fee" on cars affected by US President Trumps 25% tariff. The report cited a memo sent to retailers saying that Volkswagen has temporarily stopped rail transportation from Mexico and will temporarily keep cars arriving by ship from Europe at the port. According to the agencys analysis of tariff codes contained in the Federal Register, Trumps 25% auto tariff will cover more than $460 billion worth of auto and auto parts imports each year. According to the report, Volkswagen told its dealers that it will provide more details on the pricing strategy for cars affected by tariffs by mid-April and plans to start distributing the cars to stores by the end of the month.European Commission President Ursula von der Leyen: The global economy is expected to suffer significant losses. Uncertainty will rise sharply and trigger new protectionism.European Commission President Ursula von der Leyen: Europe will stand on the side of those countries directly affected.European Commission President Ursula von der Leyen: We will stand together and our unity is our strength.

On weaker China PMI, stimulus focus, and US NFP data, USD/CNH rose above 6.9100

Daniel Rogers

Sep 01, 2022 15:24

截屏2022-09-01 上午10.37.00.png 

 

While the USD/CNH halted its three-day rally on Wednesday, it has since recovered some of its lost ground during Thursday's Asian trading as risk aversion and disappointing activity statistics push the pair higher. The pair's purchasers, however, are treading carefully as they await the introduction of the Chinese government's stimulus plan.

 

Caixin Manufacturing PMI in China fell to 49.5 from 50.2 predicted and 50.4 earlier, signaling the steepest decline in activity in three months. In doing so, the private manufacturing index confirms the gloomy state of the world's largest industrial sector, just as the official NBS PMI does.

 

According to Reuters's citing of state-run media, the Chinese cabinet has announced that the country will unveil the specifics of a set of recently announced policy changes at the start of September. According to the report, China's cabinet also plans to instruct commercial banks to make available medium- and long-term loans for infrastructure development and modernization.

 

Their power is bolstered by factors like China's covid-led lockdowns and rising tensions with Taiwan. The president of Taiwan, Tsai Ing-Wen, has recently expressed an interest in bolstering ties with the United States in the semiconductor industry.

 

The USD/CNH exchange rate also appears to be driven by central bankers' aggressiveness and strong US Treasury rates notwithstanding deteriorating data. Nonetheless, US 10-year Treasury rates have increased to a two-month high of around 3.21 percent, and 2-year bond coupons have increased to their highest levels since 2007 at around 3.51 percent. The S&P 500 Futures were trading at 3,930, down 0.36 percent intraday, their lowest level since late July as of publishing.

 

The US ADP Employment Change rose by 132K on Wednesday, below the 288K forecast and the 270K prior reading. However, year-over-year wage growth in August was 7.6 percent in the United States, which put Fed policymakers on edge. Following the release of the statistics, Cleveland Federal Reserve Bank President Loretta Mester told Reuters on Tuesday that she did not anticipate a rate cut from the Fed in 2019. Further, Lory Logan, the recently installed president of the Dallas Fed, has joined the ranks of hawkish central bankers by declaring, "Restoring price stability is our primary aim."

 

High inflation numbers and hawkish pronouncements from European Central Bank (ECB) and Bank of Japan (BOJ) policymakers highlight the central bankers' typically hawkish posture not only in the United States, but also in the Eurozone and Japan.

 

Positive news about the Chinese stimulus and the expected increase in the US ISM Manufacturing PMI for August from 52.0 to 52.8 on Friday should attract traders ahead of the release of the US Nonfarm Payrolls report on Friday (NFP).

 

At the time of writing, a USD/CNH decline seems unlikely until a support line near 6.8850 is broken. Even still, Monday's multi-month high of 6.9326 seems to have drawn buyers.