8 Apr 2015
USD/CNY neutral bias - BTMU
FXStreet (Guatemala) - Analysts at Bank of Tokyo Mitsubishi offered a neutral bias for USD/CNY.
Key Quotes:
"NEUTRAL BIAS – (6.1750-6.2150)".
"We're not completely sure if PBOC has solved its problem of creating liquidity when capital was flowing out (as in 4Q14). But recent money market rate drops haven't seemed too difficult, perhaps because, as SAFE told us, capital is flowing back into China. So we also suspect 1Q15 foreign reserves will surprise to the high side, which will provide support for CNY."
"The economy we think is bottoming but we're not yet sure if this will be smooth. Any eventual recovery could restore confidence in CNY, and we believe price action since mid-March (orchestrated by PBOC) has probably curbed some bullish enthusiasm, for now."
"We expect a +ve surprise for total social financing, too, showing monetary taps fully open; but till more fiscal stimulus kicks in we won't see much effect on the economy. Fixings should remain neutral for now."
Key Quotes:
"NEUTRAL BIAS – (6.1750-6.2150)".
"We're not completely sure if PBOC has solved its problem of creating liquidity when capital was flowing out (as in 4Q14). But recent money market rate drops haven't seemed too difficult, perhaps because, as SAFE told us, capital is flowing back into China. So we also suspect 1Q15 foreign reserves will surprise to the high side, which will provide support for CNY."
"The economy we think is bottoming but we're not yet sure if this will be smooth. Any eventual recovery could restore confidence in CNY, and we believe price action since mid-March (orchestrated by PBOC) has probably curbed some bullish enthusiasm, for now."
"We expect a +ve surprise for total social financing, too, showing monetary taps fully open; but till more fiscal stimulus kicks in we won't see much effect on the economy. Fixings should remain neutral for now."