The offshore Chinese yuan has fallen from 7.14 per dollar to just 7.06 currently
- PBOC sets USD/ CNY reference rate for today at 6.9683 (vs. yesterday at 6.9225)
- China moves to stabilise the yuan, PBOC issuing bills in Hong Kong
In particular, the massive CNH bill issuance is the one suggesting that the Chinese central bank isn't looking for the currency to weaken too much, too quickly in my books. As such, we're seeing a quick turnaround in risk sentiment as well.
US equity futures have pared all of its earlier losses with S&P 500 futures erasing 1.9% of declines. More impressively, South Korea's KOSDAQ index has erased losses of 5.1% seen earlier in trading today.
Bonds are also seeing gains reverse sharply now with Treasury yields climbing heftily across the board. 10-year yields are up by nearly 6 bps to near 1.77% currently.
As such, we're seeing flows reverse from yesterday with the dollar gaining ground and the yen being the biggest loser with USD/JPY climbing briefly above 107.00.
