EBC Markets Briefing | Chinese yuan steadies despite weak data
The Chinese yuan held steady on Monday ahead of a pivotal week filled with central bank decisions led by the Fed. Trading in Asia was thinned with markets in Japan closed for a holiday.
US and Chinese officials began talks in Madrid Sunday to discuss key national security, economic, and trade issues, including the upcoming deadline to divest TikTok and US tariffs.
Trump said he is "ready to do major Sanctions on Russia" once all NATO countries pause their purchases of oil from Moscow. He was urging the member states to impose severe secondary tariffs on China and India.
The world's second largest economy lost momentum in August, with growth slowing across the board as weak domestic demand persisted. Both retail sales and industrial output both missed expectations.
Fixed-asset investment saw a sharp slowdown from the 1.6% expansion in the January to July period. Within that segment, the contraction in real estate investment worsened, fuelling concerns about its prospect.
The Chinese bond selloff that drove benchmark yields to the highest level in nine months last week is spurring speculation the central bank is moving closer to restarting debt purchases.
The yuan has been trending higher since the US stuck deals with most of its major trade partners. The base scenario appears to be a further gain towards 7.1150 per dollar.
EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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