ShanghaiMetalsMarket
Tenderfoot
- Dec 3, 2013
- 7
- 0
- Primary Interest:
- All Treasure Hunting
SHANGHAI, Jul. 28 (SMM) – Base metal prices are poised to gain more this week as bullishness gathers pace across commodity markets, Shanghai Metals Market foresees.
Analysis of Major Macroeconomic news in China
Money supply
Against the backdrop of new share purchases and aggressive bond issuance, the People’s Bank of China (PBOC) suspended repo operations again last week, as it did the first week of July, injecting funds into the market for an 11th straight week. Chinese Premier Li Keqiang affirmed last Wednesday that more measures to ease financing costs and loosen liquidity may be deployed. Rather than simply cutting interest rates, the PBOC will adjust monetary policy to be more accommodative, suggesting that monetary policy will remain loose for some time in China.
Chinese currency
The CNY:USD spot exchange rate diverged from its central parity again last Wednesday and Thursday. The spot yuan strengthened to its highest in 3½ months last Wednesday by closing 6.1983 per USD. The spot yuan then rose further to 6.1912 at 10:20 (Beijing time) the next day, the highest since April 10. The CNY:USD central parity rate in interbank foreign exchange markets, in contrast, closed 7 basis points lower at 6.1579 July 24, softening for a second trading day, according to the China Foreign Exchange Trade System (CFETS).
Forex receipts tumbled 88.28 billion yuan across all financial institutions in China in June. This was not only the first decline in more than ten months, but also the largest monthly decline in two and a half years. The shift to bidirectional exchange rate movement and individuals refraining from converting foreign currencies into the yuan were blamed for the dramatic fall in forex receipts. China’s foreign trade holding steady, the lack of guidance from the central parity rate, and investor caution may blur short-term movements in the yuan.
Analysis of Major Macroeconomic news in China
Money supply
Against the backdrop of new share purchases and aggressive bond issuance, the People’s Bank of China (PBOC) suspended repo operations again last week, as it did the first week of July, injecting funds into the market for an 11th straight week. Chinese Premier Li Keqiang affirmed last Wednesday that more measures to ease financing costs and loosen liquidity may be deployed. Rather than simply cutting interest rates, the PBOC will adjust monetary policy to be more accommodative, suggesting that monetary policy will remain loose for some time in China.
Chinese currency
The CNY:USD spot exchange rate diverged from its central parity again last Wednesday and Thursday. The spot yuan strengthened to its highest in 3½ months last Wednesday by closing 6.1983 per USD. The spot yuan then rose further to 6.1912 at 10:20 (Beijing time) the next day, the highest since April 10. The CNY:USD central parity rate in interbank foreign exchange markets, in contrast, closed 7 basis points lower at 6.1579 July 24, softening for a second trading day, according to the China Foreign Exchange Trade System (CFETS).
Forex receipts tumbled 88.28 billion yuan across all financial institutions in China in June. This was not only the first decline in more than ten months, but also the largest monthly decline in two and a half years. The shift to bidirectional exchange rate movement and individuals refraining from converting foreign currencies into the yuan were blamed for the dramatic fall in forex receipts. China’s foreign trade holding steady, the lack of guidance from the central parity rate, and investor caution may blur short-term movements in the yuan.
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