US Initial jobless claims will be announced on Thursday at 15:30 MT time.
Chinese companies hurry to hedge as Yuan swings start stinging
Heavily affected by the Yuan's sudden leapt in 2017, many Chinese companies are starting to trade currency derivatives for the purpose of hedging risks. However, many mainland companies are still exposed to fluctuations in China's extremely volatile Yuan.
For years Chinese companies have been accustomed to a steady Yuan, which moved in one direction for a long time. Obviously, Yuan hedging markets aren’t developed enough yet, mostly suppressed by the key bank's severe requirements for hedging as well as the limited participation of speculators, not to mention large state-owned companies capable of making markets more liquid.
Volatility has inched up steadily since 2015 right after the PBOC made up its mind to let market forces enjoy a greater sway in the Yuan's direction. Additionally, China’s major financial intuition clamped down on capital flows. The bank also became more unclear and uncertain in the way it sets the Yuan’s value.
The US dollar has broken through the key resistance, it failed to cross since March so far. Riskier assets are dipping. Let’s discuss it in detail.
Services and Manufacturing PMIs are out on Wednesday at 11:30 MT time.
China’s Manufacturing PMI will be out on Wednesday at 04:00 MT time!
China's industrial rebound, progress in US fiscal stimulus and other important news in this article.
The market sentiment is mixed as investors weigh US stimulus package against the rising infections and worse-than-expected US unemployment claims. Jump in for fresh analysis of EUR/USD, USD/JPY, S&P 500 and gold!