Analysts at HSBC, argue that the strong performance of mainland Chinese equities is in line with a reflation theme, supporting the renminbi (RMB). They think the Chinese currency will strengthen over the near term. Key Quotes: “The yield advantage of the RMB is gaining further, with the 10-year mainland Chinese government bond yield spread over the 10-year US Treasury at 230bp. The RMB has clearly lagged the yield advantage’s argument. It has also lagged the underlying FX flow improvement.” “The currency’s underperformance vs. economic fundamentals reflects a degree of caution given geopolitical risks, in our view.” “The risk of a weaker RMB could return later if asset bubble concerns return and when the US unveils the details behind the China sanction bill before its November election. We also need to closely monitor mainland Chinese regulators’ reaction towards the recent equity rally.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Dollar Index Price Analysis: 96.40 looks like a sticky support zone but it could still give way FX Street 3 years Analysts at HSBC, argue that the strong performance of mainland Chinese equities is in line with a reflation theme, supporting the renminbi (RMB). They think the Chinese currency will strengthen over the near term. Key Quotes: “The yield advantage of the RMB is gaining further, with the 10-year mainland Chinese government bond yield spread over the 10-year US Treasury at 230bp. The RMB has clearly lagged the yield advantage’s argument. It has also lagged the underlying FX flow improvement.” “The currency’s underperformance vs. economic fundamentals reflects a degree of caution given geopolitical risks, in our view.” “The risk of a… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
