Geopolitical tension between the US and China is obviously weighing on the yuan right now.
But if you just look at the March and April intervention proxies, there is absolutely no sign of pressure.
1/n
But if you just look at the March and April intervention proxies, there is absolutely no sign of pressure.
1/n
The settlement number includes the state banks, and imo it is more reliable than PBOC's balance sheet number (the PBOC seems to try hard to keep balance sheet reserves stable, so it is a bit too stable).
and settlement has been in the +10b to 15b range the last 2ms
2/n
and settlement has been in the +10b to 15b range the last 2ms
2/n
The puzzle broadly speaking is that the CNY's relative weakness (v the USD, the story v the basket is a bit different) would normally be associated with outflows and some sales, and we haven't seen that in March and April
3/n
3/n
so my view is that the CNY is being particularly heavily managed right now --
and the current conventional wisdom that it will move in response to US actions is basically correct ..
4/4
and the current conventional wisdom that it will move in response to US actions is basically correct ..
4/4
