USD/CNY: 6.32-6.40 neutral bias – BTMU

By FXStreet FXStreet (Guatemala) – Analysts at Bank of Tokyo Mitsubishi explained that on balance, October data was marginally worse, as implied by the contemporaneous stock market reaction.

Key Quotes:

“So our recipe remains: Weakening economy, means no stabilization of economic expectations, means capital keeps flowing out, means intervention. And it’s still a long (= lots of reserves), losing (= sterilized intervention) grind higher. Maybe we’ll see more shock and awe from Big Brother next week. Bids onshore are suppressed; offshore trading is a signal of such bids. But don’t call these markets decisive; more like stifled.

Government fiscal expenditures are up more than 18%YTD, but no seeming stimulus impact. The local debt-for-bonds swap is up to CNY4trn in size (quadrupling from its initial announcement). No one seems to see the connection.”
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Source:: FX Street