China’s yuan is likely to return to a “reasonable range” soon
The yuan will likely return to a “reasonable range” of six to seven against the US dollar as early as next year, said Han Baojiang, director of the Party Committee’s School of Economics department. Central of the Communist Party of China.
That’s according to a CNBC translation of his Mandarin comments at a virtual event hosted by the China Association of Journalists.
He said that in his view, the depreciation of the yuan is linked, to some extent, to China’s economic difficulties at the moment.
Next month, the 20th National Congress of the Communist Party of China is expected to provide a clearer outline of policy, which will help expectations, he said.
Han said in response to a separate question that Chinese President Xi Jinping’s message of further opening up will dominate the congress report and that after the congress he expects China to open up more than never
—Evelyn Cheng
The Indian rupee hits a record high of 81.94 against the US dollar
The Indian rupee weakened to a record against the US dollar, hitting 81.940 per dollar. It last traded at 81.905 against the greenback.
The US dollar’s momentum has strengthened by almost 10% against the Indian rupee so far this year.
US 10-year Treasury yield tops 4% for first time since 2010
CNBC Pro: Credit Suisse says now is the time to buy two green hydrogen stocks, offering one up more than 200%
Credit Suisse says it’s time to get into the green hydrogen sector, with a number of catalysts poised to boost the power of clean energy.
“Green hydrogen is a growing market – we are increasing our market estimates for 2030 [over] 4x,” said the bank, which forecast green hydrogen production to expand about 40 times by 2030.
Name two actions to play the boom, giving an advantage of more than 200%.
CNBC Pro subscribers can read more here.
– Weizhen Tan
Chinese Yuan Weakest Since 2008, Dollar Index Strengthens
The offshore and onshore Chinese yuan topped 7.2 against the dollar, hitting its weakest levels since early 2008.
The US dollar index also gained 0.33% to trade at 114.47.
Japan’s consumer inflation could ease in 2023: BOJ meeting minutes
Consumer inflation, excluding fresh food, is likely to rise this year, but the rate of increase will slow thereafter in energy prices, minutes of the July meeting said of the Bank of Japan.
Some members also said that inflation, excluding fresh food and energy, is unlikely to reach 2% within their projection period. This CPI reading was 1.6% in August.
“These members expressed the view that, unless commodity prices continued to rise, the CPI inflation rate was expected to decline from fiscal year 2023,” the minutes said .
On the yen, a BOJ board member said downward pressure on the currency could ease if a slowdown in the global economy led to lower inflation and interest rates around the world .
Another member said the yen could even appreciate if the global economy faces shocks.
— Abigail of
CNBC Pro: The asset manager reveals what’s next for stocks and shares how the market is trading
Neil Veitch, chief investment officer at Edinburgh-based SVM Asset Management, says he expects the macro picture to remain “quite challenging” for the rest of the year.
Speaking on CNBC Pro Talks last week, Veitch named the key factors that could help the stock market become “more constructive” and shared his view on growth versus value.
CNBC subscribers can read more here.
— Xavier Ong
Earnings questions, potential recession mean more could be sold
The Dow and S&P 500 have fallen for six straight days, and many of them have seen the broad selloff typical of so-called “washout” days.
It can sometimes be a contrarian buy signal on Wall Street, but many investment professionals are skeptical that the selloff is over. One reason is that profit expectations for next year still show solid growth, which would be unlikely in a recession.
“We know that if we start to see a turnaround in 2-year yields … and if we start to see a turnaround in the dollar, that gives us the ability to bounce back from these extremely oversold conditions,” said Andrew Smith, head of investments. strategist at Delos Capital Advisors in Dallas. “But it’s hard for me to reconcile in my mind that the earnings story will be as good as we expect.”
Also, dramatic moves in the bond and currency markets mean that “something has broken,” and it may be smart to wait for that information to emerge, Smith said.
On the bright side, Smith pointed to a strong labor market and signs of continued travel spending as a sign that the US economy can avoid a major recession.
– Jesse Pound
The US 10-year yield closes at the key 4% level.
The 10-year Treasury yield is close to 4%, a level it hasn’t touched since 2010.
The US 10-year yield is the benchmark yield that sets the course for home mortgage rates and other consumer and business loans. It is higher this week as UK gilt yields rally and an aggressive Federal Reserve is expected.
The return was 3.96% in the afternoon. The 10-year yield reversed an earlier decline and gained a few basis points. (One basis point equals 0.01 of a percentage point)
“It’s definitely been impressive, and I don’t think anyone’s ready to step in and take the falling knife yet,” said BMO’s Ben Jeffery. He added that the lack of liquidity has also pushed up yields, which move against price.
Jeffery said the yield was also rising ahead of the 5-year note auction at 1 p.m.
He said the 10-year tested the 4% level in 2010. “The last time we were above 4% sustainably was in 2008. There’s another technical level at 4.10% and then there is not much note to 4.25%,” he said.
—Patti Domm