Analysis and Recommendation: The USD/CNY is flat with the Chinese Lunar holiday beginning today and continuing until Friday leaving Asian markets a bit
The USD/CNY is flat with the Chinese Lunar holiday beginning today and continuing until Friday leaving Asian markets a bit quieter. Ahead of the holiday on Saturday, the PBOC announced additional stimulus and then this morning’s release of currency reserves kept traders busy before the holiday. The yuan is trading at 6.5739.
China’s massive foreign exchange reserves shrank for the third month in a row to the lowest levels since May 2012.
The People’s Bank of China reported Sunday that during January reserves dropped by $99.5 billion to $3.23 trillion, slightly more than the $3.2 trillion markets expected in their poll Reuters said after the data was released.
At $99.5 billion the fall is second only to December’s drop in reserves of $107.9 billion, and shows the trouble Beijing is having restraining capital flows and fighting the trend toward a weaker Yuan.
For the year to December reserves dropped $513 billion. But if the current pace keeps up China will burn through more than $1 trillion of its war chest this year.
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Today’s economic releases:
Upcoming Economic Events that you should be monitoring:
Tuesday, February 9, 2016
Cur. | Event | Actual | Forecast | Previous | |||
China – Lunar New Year | |||||||
AUD | HIA New Home Sales (MoM) (Dec) | -2.7% | |||||
GBP | BRC Retail Sales Monitor (YoY) (Jan) | 0.4% | 0.1% | ||||
AUD | NAB Business Confidence (Jan) | 3 | |||||
EUR | German Industrial Production (MoM) | 0.4% | -0.3% | ||||
EUR | German Trade Balance (Dec) | 20.2B | 19.7B | ||||
GBP | Trade Balance (Dec) | -10.35B | -10.64B | ||||
GBP | Trade Balance Non-EU (Dec) | -2.55B | -2.45B | ||||
USD | JOLTs Job Openings (Dec) | 5.400M | 5.431M |
Government Bond Auctions
Date Time and Country
Feb 08 16:20 Italy Details of bond auction
Feb 09 11:00 Netherlands Holds DSL auction
Feb 09 11:00 Austria Holds bond auction
Feb 09 11:30 Germany Holds I/L bond auction
Feb 09 11:30 UK 0.125% 2026 Gilt linker auction
Feb 09 n/a UK Details of Gilt auction on Feb 17
Feb 09 19:00 US Holds 3-year note auction
Feb 10 11:30 Germany Euro 5bn Mar 2018 Schatz
Feb 10 17:20 Sweden Details of bond auction on Feb 17
Feb 10 19:00 US Holds 10-year note auction
Feb 11 N/A Italy Euro 4-5bn 30-yr syndicated bond auction
Feb 11 11:03 Sweden Holds I/L bond auction
Feb 11 11:10 Italy Announces details of bond auction
Feb 11 11:30 UK 3.5% 2045 Gilt auction
Feb 11 19:00 US Holds 30-year bond auction
Feb 11 n/a US Details of 30-yr TIPS auction on Feb 18
Feb 12 11:10 France Details of bond auction on 18 Feb