Ahead of today's onshore yuan reference rate setting, a brief excerpt from a JP Morgan note
Citing
- recent surge in Treasury yields
- possibility of further tantrum episodes sending yields up
- the USD is in a more constructive phase - US economic growth upgrades due to huge fiscal stimulus
- USD will outrun EM and specifically China growth
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As you can see from the chart below, JPM are not bullish for USD/CNY despite all the positives they cite, its just they are not as bearish as they were:
