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China's money supply explodes.China's revision of its M1 money supply calculation in January 2025, which now encompasses individual checking accounts and assets held in non-bank financial institutions, seeks to deliver a clearer understanding of liquidity within its economy. The reported surge from $67 trillion in December 2024 to $112 trillion in January 2025 has ignited discussions, with some viewing it as a strategy to obscure underlying economic issues, such as a potential deflationary debt spiral. The People's Bank of China has declared a "moderately loose" monetary policy for 2025, aiming to boost the money supply and lower interest rates to foster economic growth, a move that may be connected to the M1 recalibration. This shift takes place against a backdrop of broader macroeconomic adjustments, including a 5% GDP growth target and initiatives to stabilize the real estate sector, as detailed in China's 14th Five-Year Plan for 2025.
ECONOMICS:CNM1Long
by BallaJi
Goldman Sachs Predicts China's Central Bank to Cut Reserve RequiGoldman Sachs analyst Hui Shan expects China's central bank to reduce the reserve requirement ratio (RRR) in the third and fourth quarters, aiming to manage the decline in long-term yields. This move comes in response to rising bond prices and weak aggregate demand. The People's Bank of China (PBOC) is also focused on reducing financing costs for companies and households. Meanwhile, the yuan carry trade is under scrutiny as the Chinese currency strengthens against the dollar. Analysts are monitoring the potential risks and the impact on global markets.
Long
by MorMedia
NZD/USD climbs ahead of retail salesThe New Zealand dollar has posted strong gains on Tuesday. In the European session, NZD/USD is trading at 0.5959, up 0.55%. On the data calendar, New Zealand retail sales are expected to decline by 2.6% q/q in the second quarter, compared to -1.4% in Q1. The New Zealand dollar has gone on a dreadful slide since mid-July, falling as much as 500 basis points during that spell. The current downswing has been driven by weak global demand and jitters over China's economy, which is showing alarming signs of deterioration. Chinese releases have been pointing downward recently. Exports and imports have fallen, manufacturing activity is weak and the world's second-largest economy is experiencing deflation. Last week, Evergrande, a huge Chinese property developer, filed for bankruptcy in the United States, raising fears of contagion to other parts of the economy. It wasn't long ago that the Chinese 'miracle' was being touted as an economic powerhouse on the global stage, but now the world's second-largest economy is in deep trouble and is dragging down global growth. An interesting silver lining is that deflation in China could help lower inflation worldwide, which would be good news for the Fed, ECB and other central banks that are battling to push inflation lower. The People's Bank of China (PBOC) has responded in recent days to the economic slowdown with some cuts to lending rates, but surprisingly, has not trimmed the five-year loan prime rate, which has a major impact on mortgages. The PBOC's lukewarm move to the economic crisis could mean China's economy will continue to sputter, and that is bad news for the New Zealand dollar, as China is by far New Zealand's largest trading partner. If Chinese releases continue to head lower, we can expect the New Zealand dollar to continue losing ground. NZD/USD has pushed above resistance at 0.5941 and is putting pressure on resistance at 0.5978 There is support at 0.5885 and close by at 0.5848
by OANDA
China A50 holds its ground despite weak sentimentAU wages came in weak, The RBA hinted that they think they're done tightening in the minutes, The PBOC cut rates (again) and a slew of data from China once again misses the mark. And all in a 30-minute period! I think we’re fast approaching a phase where bets will be on for another round of stimulus. The China A50 is holding its ground above 12,600 and AUD/USD has managed to hold above yesterday’s YTD low despite the weak data. There’s a floor under these prices, and any rumours of stimulus could potentially light the bullish match for these markets to bounce. Economic data from China continues to disappoint, with retail sales, industrial production and fixed-asset investment data all missing the mark today. This follows on from disappointing trade figures for Q3 with imports and exports contracting at a much faster pace than feared, and loan demand falling to its lowest level since 2009. Yet somehow, the China A50 is still holding above the 12,400 base it formed in Q2 (despite negative headlines) before falling on news of stimulus. Are we about to witness a similar scenario? Perhaps. The PBOC announced that they have cut rates for a second month in three, a move not expected by the majority of economists. But it does suggest there is some panic, and with that comes hopes of more stimulus. If a market can’t go lower on bad news, it may not take much ‘good’ news to help it rally. A bullish hammer formed on the daily chart on Monday and prices are holding above its low despite the negative sentiment. We therefore see the potential for a rally to at least 13k, either on hopes of stimulus (or confirmation of it).
FOREXCOM:CHINA50Long
by CityIndex
Jackson impacting USDAfter an important Jackson, Powell consistent attempt at persuading (or forcing) equities higher is coming to an end and it is time for a round of chart updates across the board. This sort of tendency, which toys with the idea of tapering and rolling up purchases should be seen as such; USD shorts are increasingly less appropriate; but here the dominating factor between the two currencies is the transition to CBDCs and a race to the bottom. The well being and woes of China who are already miles ahead in their fourth beta test, will determine effectively who cancels the currency first. A very plausible move throughout 2020 since buyers remained hesitant to play the safety leg. I was hesitant to play the leg higher but this decision made things a lot easier. The correct course now is switching to a new course, this time an ABC sequence towards 7.31x (+13% from current levels) into 2022 to offer lasting protection, invalidation for this move will come below March 2018 lows (-3% from current levels).
Long
by ridethepig
10
As policies continue to diverge…For readers who have been following us right from our first ever TradingView idea, you’ll recall our first ever trade idea on long USDCNH. It’s been a fun 5 months writing and sharing our thoughts with the community. Much has happened since April, but two critical things stayed the same. The US Federal Reserve remains hawkish, raising rates, while the PBoC remains dovish, continuing with its easing stance. The result? USDCNH trading beyond the 6.9 level, surpassing both our target levels. With the next Federal Reserve meeting coming up, we think it’s time to review this idea again. The CME FedWatch Tool allows us to gauge what market participants are expecting the Fed to do. The prevalent consensus seems to be that the Fed is likely to raise rates till the end of the year before holding rates at the 3.75 – 4.00 % level for the next year. On the other hand, the PBoC has continued to ease, cutting reserve requirement ratios & lowering its medium-term lending facility. With China still battling Covid via lockdowns, persistently low inflation numbers, and weak economic numbers, we see further easing on the cards from PBoC. Looking at the charts, the USDCNH pair has just completed a symmetrical triangle chart pattern. After breaking out to the upside and a brief pull-back, prices continued upwards with strong momentum. Using classical charting techniques, the target levels for the breakout can be set to the distance of the high and low of the symmetrical triangle and applied to the top of the triangle. With the target price of 7.1180, there is still upside for this trade. It seems that policy divergence will remain for these two major economies, which is likely to strengthen the USD and weaken the CNH further, driving up the USDCNH pair. Using technical to identify target levels where we will be comfortable, we think that there is room for more upside. Entry at 6.9500, stop at 6.8545. Target at 7.1180. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. Reference: www.cmegroup.com
CME:CNH1!Long
by inspirante
9
Dominant Currency Sentiment – JPY Remains SupportedAntipodeans leading to the upside, with some support garnered from the PBoC’s efforts to prop up China’s economy, including easing its RRR and an injection of CNY 10 billion via 7-day reverse repos. However, despite the above, concerns surrounding the global economic outlook are continuing to grow, pulling the antipodeans off their best levels and supporting JPY, which also remains supported across the board. As such, AUDJPY is quickly approaching the 92.00 handle, while NZDJPY was unable to hold the 85.00 handle after briefly breaking above in late Asia-Pacific trade. Looking ahead, today’s economic calendar is light on tier one data, keeping the market’s attention fixed on ongoing themes such as the global economic outlook, China’s economic outlook/lockdown and policy divergences between central banks.
by thunderpips
USDCNH: Yuan, Yuan, YuanAnalysts have been asking if China will allow the Yuan to weaken for ages, and now it's starting, everyone's gone quiet... Why is China's currency weakening now? One explanation is yield differentials. Once upon a time, you could invest in Chinese bonds and earn a lovely premium vs US yields for doing so. That isn't the case now 👇 Chinese yields have gradually fallen, while US yields have risen sharply: Now, this could all wash out. Dollar strength is being driven by the Federal Reserve's hawkish tones and high inflation in the US. Bostic is already worrying about global growth and talking up the need to be "cautious". If some of the 2022 Fed voters start to talk up those same concerns, maybe the markets begin to scale back those hike expectations, and weaken the dollar. But that's only one side of the equation... Back in 2015, the PBoC devalued the Yuan by 3%. Which if you look at it on the chart wasn't that big a deal... It was a controversial decision however... The move was unexpected , and many believed it was a desperate attempt by China to boost exports in support of an economy that was growing at its slowest rate in decades. However, the PBOC claimed that the devaluation was part of its reforms to move toward a more market-oriented economy. The sudden shift sent a signal, and the yuan hasn't revisited the 6.20 level since. And things don't really look too different now. China's economy is slowing, while global growth/demand is slowing too. And for all the big promises of "common prosperity" or boosting domestic demand, nothing has really changed. Back in August 2019, growth concerns were front and centre. The yuan was far weaker than it is now, trading above 7 per dollar. A weaker yuan was seen as a positive development for the Chinese economy by making their products cheaper for foreign buyers. It might not be so abrupt, but there are plenty of reasons for the Chinese authorities not to push back too vigorously against a weaker Yuan.
Long
by FinkPro
Hawks vs Doves, the battle of CNH…CNH1! Birds of different feathers are likely not to flock together! As policy divergence continues between the US Fed (Hawkish) vs the PBoC (Dovish), we expect the Dollar to strengthen against the RMB on a macro level. On the technical side, we see a bullish RSI divergence (prices making lower lows while RSI making higher lows), suggesting that momentum is nearing the end and potentially reversing. We also note proximity to the long-term support level since 2014 as an additional bullish factor. Entry at 6.355, stop at 6.2955. Targets are 6.580 and 6.720. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
CME:CNH1!Long
by inspirante
13
Is the Chinese Yuan Readying to Reverse?The Chinese Yuan spent most of 2021 appreciating against the US Dollar despite a broadly upbeat year for the latter. Now, fundamentals may be paving the way for its turnaround amid the risk of slowing demand for Chinese exports - www.dailyfx.com USD/CNH recently turned higher following a more hawkish Federal Reserve, reinforcing the key 6.3526 - 6.3238 support zone. Meanwhile, the PBOC is looking comparatively dovish. Positive RSI divergence shows that downside momentum is fading, which can at times precede a turn higher. Immediate resistance appears to be the 61.8% Fibonacci extension at 6.3833 before the midpoint at 6.4110. Down the road, the pair would have to face falling resistance from March which could reinstate the broader downside focus. On the other hand, taking out the key support zone exposes the 100% extension at 6.2936.
by QM_Dubrovsky
1
Australian dollar trading sidewaysTis the week of Christmas, which means eggnog, crackling fireplaces and thin liquidity in the markets. With Australian markets closed on Monday, the Aussie has shown little movement today and this should continue in the North American session. There are no Australian events on this week's calendar, so any movement of AUD/USD will come from events abroad. The US has mostly tier-2 releases this week, so events in China may have a magnified impact on the Aussie. There were some positive developments on the weekend in China. The PBOC said it would provide more support for the economy. As well, there were media reports that Evergrande has resumed most its home construction projects. The mammoth company owes more than USD 300 billion in liabilities, and any news concerning Evergrande could have an impact on the Australian dollar, as China is Australia's largest trading partner. With a very light calendar, market participants will have some time to focus on the RBA, which has been in the headlines frequently in recent weeks and published the minutes of the December meeting just last week. The minutes were cautiously optimistic. with the bank saying that it did not expect the Omicron variant to derail the economic recovery. Still, the bank noted that Omicron "posed additional uncertainty for the near-term outlook." Given the disparity between RBA guidance and the markets' expectations for a rate hike, this language is a signal that the bank has no intention of raising interest rates anytime soon. The month of December is all about volatility, and the Australian dollar has already delivered on that front, with significant movement. Liquidity will be thin as we head towards the New Year, which could mean further volatility, especially if there are further developments surrounding Omicron, good or bad.   0.7288 has held in resistance since mid-November. The next resistance line is at 0.7354 There is support at 0.7119 and 0.7016
by OANDA
ridethepig | CNH Market Commentary 22.08.2021Buyers position marks (5) as a soft and temporary floor. Other events can cause the base to appear a lot stronger than it does, so the transfer of the attack from one direction to the other can be subtle, although not a matter of pure chance. It has been a relatively straight forward flow, but one that has not seen much light thrown on the subject thanks to noisy explanations. As can be seen in the charts below, @ridethepig was concerned at the highs. The said possibility of a temporary floor is much rather a natural profit taking move in the struggle against sentiment. A considered judgement about the perverse signally from PBOC and Xi ought to look something like; base at 6.35xx is strong support (after the powerful legs lower it is very sensitive). That is the real truth, we are inside a multi-year decline that could go a lot. lot lower, for now, we shall have to content ourselves with limiting adding short positions till we are back above (4) highs at 6.587x for another test of the lows in our current range (6.58x - 6.40x).
Long
by ridethepig
2
ridethepig | Gold in CNY📌 The lows in Gold are an elegant threat for another leg higher towards the highs; name wave 5 which is the one that we have been tracking since the previous diagram: I love it when an idea comes together. We arrived at the destination for our retrace and have started to form a base. Sellers are vacating! Moreover, buyers are now keeping their eye on the momentum gambits, these are particularly for their fancy. A change of scenery from the channel would be enough to do the technical damage, there is hope for the combination and recommend keeping some powder back to go massive when it start working. This is exactly the same way we played it with the 3rd wave up... try with one or two positions in the opening, no more. Once you break the block add another; and another; and eventually you build an entire account which gets new and decisive in its own way. Anything but selling the premium! So the XAUUSD annotation: Also much clearer is the flow in XAUUSD which, since the prospect of dollar getting devalued, makes it a lot easier and more important to track. Thanks as usual for keeping the feedback coming 👍 or 👎
FX_IDC:XAUCNYLong
by ridethepig
ridethepig | CNY for the Yearly Close📌 CNY for the Yearly Close... In the usual tradition, this topping formation appeared to fit the bill! The correct way to play it was for sellers to proceed; dollar weakness was knocking while CNY was quite tenable. It is now obvious that the above mentioned development has been less time consuming that the initial legs higher: This means the position we are tracking into the yearly close appears quite harmless but is very alarming. Sellers are now threatening to occupy the lows, in addition it has been quite comfortable for them with Trump unable to say much, the Biden Whitehouse will ensure dollar devaluation with extreme care. This year has clearly been the year of the yuan. In order to chase the moves lower; let's look for some targets and areas to unload liquidity - I am tracking 6.242x for the minor targets and 6.040x for the major targets in 2021. This obviously recognises the charming continuations, sellers should look for any weak rallies to scale into towards year-end. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
$USDCNH DRIVES USD WEAKNESS BUT POSSIBLE MEASURED MOVE COMPLETEUSDCNH has been a strong driver of USD weakness and has weakened more that 7% over 5months, straight line. Looking at the technical structure of the double top and breakdown right through the neckline levels, the measured move takes us down to where USDCNH put in a low last week at 6.627. Last week produced a reversal candle (though a weak one) closing around 6.665 just below the key 6.67 and 6.74 handles. There is momentum divergence on the lower lows and completes the measured move. Technically a strong case for a bounce here. PBOC are getting concerned about recent USD weakness which could hurt exports and meeting inflation targets. They will act to achieve their targets and this pivot zone looks like a good reference level on how much they are willing to let the CNY appreciate against the USD. For now, the added uncertainty of US elections and what it means for escalating US-China tensions means market sentiment will lean on the cautious side and see some safe have demand, and some upward consolidation in USDCNH. I don't have a position but keeping an eye on this as I engage in pro-USD trades.
Long
by doejistar
ridethepig | USDCNH Long Term Macro Playbook📍 USDCNH An interesting few days for those in Chinese rates, a 100bp move in the front end, what an express train move!! Never seen anything like this before and shows the power from vol in repo fixing. PBOC will want to keep the pressure off equities, as they have been doing for some time now and hence we can see some recycling of those longs come out and make their way into bonds. This will be their only way to defend and help keep the moves to the downside contained and measured in USDCNH. In spite of the wide consolidation in Chinese Equities lately, China will be a major winner in particular from the oil crash as they were loading on the lows. The cheaper Chinese energy bill will help offset the next 12-18 month crisis. A smart move with the Oil CNY contracts as it essentially creates another mattress on the balance sheet. Later this will be described as the 'only move' that made sense and rightly so. Of course, aggressive dollar devaluation for the medium and long term is the new and decisive playbook. Sellers are happy to have held the highs, but their remaining ammunition must now make a significant impression. Those following the details of this 3rd impulsive wave may need to pull a trick or two after such a difficult battle. In any case, a test of 6.46 will be quite heart rendering, much better a deep retracement than a shallow breakup at this point .
Short
by ridethepig
1
RidetheMacro| USDCNH Market Commentary 2020.09.22✅ The optimistic numbers have proved that the world’s second largest economy is steadily recovering from the virus slump. Notably, the pair has already been falling for the 6th week in a row, therefore the report has just added tailwinds to the yuan. Moreover, the massive sell-off of the USD pushed the pair to the downside as well 📉. 📌 It’s impossible to ignore the US-China complicated relationship. There was some sign of improvement after the report of the successful phone call between two countries Recent weeks. China and the USA have promised to obey the phase-1 trade agreement, that encouraged investors. Nevertheless, there is still some uncertainty ahead of the election of the US president in November, which may significantly affect Sino-American relations. other side 📍 The Chinese central bank, the PBoC, kept the 1Y Loan Prime Rate at 3.85% and the 5Y Loan Prime Rate at 4.65%. The last time the central bank cut rates was in March.
Short
by Ridethemacro
ridethepig | USDCNH Market Commentary 2020.09.22It is a well known phenomenon that the darling of 2020 has been the Yuan. An important difference operationally for China has allowed the sharp speculators to ride the flows in the endgame of an economic cycle. We must first take a look at the outpost we spotted earlier in the year, the start of sellers activity. There are signs of some short-term dollar strength via risk which means the flows are becoming less simplistic in nature and will start to aggressively shake out the late retailers with awful entries. The continuation from this position is also down to Fed. As US continue to print and finally artificially devalue the dollar we must also track the speed of which inflation returns. Those who believe in 2% inflation making a return will be tracking the supply side chains, rather than the demand side. Less tech advancements, a pullback in globalisation and increased government intervention are bearish for US and Chinese Equities.
Short
by ridethepig
3
ridethepig | Gold in CNY📌 The struggle to claim 14,631 is notable. When studying the waves I came across similar a similar state of affairs in the earlier flows. The impulsive rally derives from its strong nature, not from itself but from much more the strategic concept of portfolio defence. A defensive move which is clearly crowded and starting to become a deer in the headlights could do with a push down to sharply shake out the late retailers who are attempting to eat off the march forward. Here we started to load longs on the breakup of the 3rd wave, a momentum gambit which we will discuss further in detail over the coming weeks, sellers outpost was taken exposing the highs. The long-term flows into gold are made from sound fundamentals and common sense ideas, however, it does not mean we cannot attempt to outplay our opponents in the interim... before they get comfy for a good night's rest! Thanks as usual for keeping the feedback coming 👍 or 👎
FX_IDC:XAUCNYShort
by ridethepig
2
ridethepig | Chinese Equities ... The Slaughtered PigThe "hanging" candle The problem is as follows: If the only way to reach risk-on in and remove social distancing is either via a vaccine (most preferred option although not really in scope till 2021) or further extreme lockdown measures (as you all know extremely costly and damaging to the monetary side) to completely remove the virus from circulation. With all roads towards confidence blockaded, it's more advisable to take a contrarian stance to the equity promoters. This is not an easy one to add too. It depends on the circumstances next week, namely on the virus front as Europe looks set to follow the US and lose control. This is something I would like you all to anticipate: it is all too easy as for the Robinhood pawns who tend to be weak when tested. The flows are as follows: 1️⃣ the flows themselves in US equities are open to attack 2️⃣ the final nail in the coffin comes from long bonds which are too much pressure to maintain: this means that the necessary complacency forces retail to buy all the junk while those smart enough unload and exert Puts / shorts. Here the notion of parking capital in China in the short-term turns out to be deceptive and soft. Once more the reason can be found in the previous SHCOMP swings: in diagrams attached below you will see excellent examples of PBOC blockaders and failures. Ride the PBOC, Feb 3rd 2020 The attempt to ride the CB flows, the hanging lows were relatively obvious and panic creates weakness which can be bought with confidence like passing clouds. SHCOMP Market Commentary, Feb 24th 2020 The pullback was a result of the PBOC and sharp hands. Many moons ago I would've been convinced by this market...not today. This leads to the long run choppy conditions and unfavourable outcome of soft hands who placed their stops too blatently. The sell side is still there on the move, ride weakness is the strategy and balance out at key support levels. Thanks for keeping the feedback coming 👍 or 👎
SShort
by ridethepig
13