7.30 was the line in the sand but can the Chinese defend their thench? We find it unlikely. But the battleground is not a safe place yet
Something for your Espresso: The Japanese fear of becoming a release valve
Masato Kanda threatens with intervention in JPY as the Japanese case risks becoming the release valve for pressures in China. Equity markets behave as we expected given the renewed pressure >7.30 in USDCNY.
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Macro Strategy Nugget: Why USDCNH > or < 7.30 is everything you need to watch
USDCNH above or below 7.20 changes the global macro regime and leads to a rotation in case it continues. Are you prepared accordingly?
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Something for your Espresso: You shall not pass!
Strong signal in the Yuan fixing this morning and Asian FX recovers. Risk appetite struggles still and markets are probably scared that the PBoC cannot defy gravity.
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Something for your Espresso: USDCNY is now the global bellwether (again)
The panic will subside if the PBoC manages to defend the 7.30 handle in USDCNY. Could we reach “peak China panic” during today’s trading? We look forward to it alongside the FOMC meeting minutes in our morning report.
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China Watch: The People’s Bank Pickle – is 7.30 the line in the sand?
The PBoC rate cuts are not a surprise to us as the pressures facing China are intensifying. But where does it leave monetary policy going forward?
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Outside the Box #10 What if China favors bridges over credit cards once more?
The West sent checks, while China focused on supply-side policies in response to Covid. But what will Beijing do now?
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5 Things We Watch: Brazil, Italy, CNY, DAX and EU Banking Crisis
Is Brazil a hideout in the current environment? How will Italy refinance its debt? Is it time for CNY to head lower? Have we seen the top in DAX? And will the banking crisis move to Europe? Find the answers here.
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Trade Alert: Five trades added to our portfolio
Our portfolio is live, and we have added USDCNH, long Japanese equities, long 2yr USTs, long EM Local Govies and the FOMO AI trade. Details are attached here.
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China Watch #2 – Reopening; Here’s how to play it
China is de facto reopening by now as we rightfully forecasted a few months back, but is a reopening equal to good news straight away? Not necessarily. Here is our playbook for the Chinese reopening.
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Steno Signals #24 – Bipolar China
A rising case count is ultimately the only trigger cable to end to the Chinese zero Covid regime, why the possibility of a reopening is currently INCREASING.
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