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China Strengthens Yuan By Most In 2 Months Following Another Massive Liquidity Injection

Tyler Durden's picture




 

The PBOC set the Yuan fix 0.08% stronger - the biggest 'strengthening in 2 months, which is interesting because following The IMF's confirmation of a delay to Yuan inclusion in the SDR basket to Oct 2016 (pending a year-end decision and asking for more flexibility), Offshore Yuan forwards notably devalued (shifting 350pips higher to 6.65, the highest/weakest Yuan in a week) pricing a 20 handle (or 3%) devaluation by August 2016. Overnight saw another CNY110bn liquidity injection rescue from The PPT in the afternoon session (saving SHCOMP from a close below the 200DMA) and tonight we see promise to recap Ag Bank along with another CNY 120bn reverse repo injection. Shanghai margin debt declined for a 2nd day in a row and Chinese stocks look set to open weaker.

Offshore Yuan forwards point to further devaluation to come...

 

But The PBOC strengthened The FIx..

  • *PBOC YUAN FIXING RISES 0.08%, THE MOST IN MORE THAN TWO MONTHS
  • *CHINA SETS YUAN REFERENCE RATE AT 6.3915 AGAINST U.S. DOLLAR

 

More focused liquidity injections today...

  • *PBOC TO REPLENISH CAPITAL OF AG DEVELOPMENT BANK: CHINA NEWS

But overnight saw another large liquidity injection...

The People's Bank of China intervened in the interbank market for a second time this week on Wednesday, pumping in 110 billion yuan through open market operations to steady interbank rates that have been shooting up as investors pull out of the yuan.

 

The PBOC confirmed after the market close that it injected 110 billion yuan to 14 financial institutions for a period of 6 months at a rate of 3.35 per cent.

 

This followed an injection on Tuesday when it added 120 billion yuan in repurchase agreements to the market.

The back-to-back cash injections came a week after the central bank allowed the yuan to devalue by more than 3 per cent over a three-day period, sparking concerns over capital outflow.

Last night's injection save stocks from a close below the 200DMA...

 

And today looks set to open weaker

  • *CHINA'S CSI 300 INDEX SET TO OPEN DOWN 1% TO 3,848.40
  • *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 1% TO 3,754.57

Despite another massive liquidity injection:

  • *PBOC TO INJECT 120B YUAN WITH 7-DAY REVERSE REPOS: TRADER

3,650 is today's level to worry about today in the Shanghai Composite

 

Commodity firms getting hammered:

  • *GLENCORE SHARES FALL 5.8% TO HK$19.60 IN HONG KONG
  • *NOBLE GROUP SHARES FALL 1.2% AT OPEN IN SINGAPORE

As Margin debt declined for 2nd day in a row...

Outstanding balance of Shanghai margin lending fell by 0.5%, or 4.5b yuan, from previous day to 875.4b yuan on Wed., according to exchange data.

Well it seems The PBOC has a different problem than wanting to devalue to save its 'exports'... the massive liquidity injection suggest the country has a dollar 'run' after all.

Charts: Bloomberg

 

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Wed, 08/19/2015 - 21:28 | 6445773 Soul Glow
Soul Glow's picture

China is paddling up shit creek with a broken oar.

Wed, 08/19/2015 - 21:37 | 6445791 r3ct1f13r
r3ct1f13r's picture

and PM's are falling in to the boat

Wed, 08/19/2015 - 21:45 | 6445803 Dead Canary
Dead Canary's picture

Galloping up diarrhea drive without a saddle.

Wed, 08/19/2015 - 21:48 | 6445807 Buck Johnson
Buck Johnson's picture

And the boat has a hole in it.

 

Thu, 08/20/2015 - 06:25 | 6446405 new game
new game's picture

with dead bloated pigs floating by. oh my, how i want to vacation in china. kabooooom.

china is unwinding faster than the commando ppt can patch billions to the Next Problems.

capitol flight, get the fuck out>smart money be gone, but really the dolla, ha - what a fcuking joke this whole ponzi fiat shit show has become.

plez bring back the daz of sound money and savings with 4-5 percent returns in sound institutions.

dream over...

Wed, 08/19/2015 - 21:32 | 6445780 nmewn
nmewn's picture

Oh, you mean openly devaluing our own citizens labor overnight isn't the way to go about this? We'll make it more expensive then!

No Wang, don't touch that.

Thu, 08/20/2015 - 04:17 | 6446350 fudge
fudge's picture

'We'll make it more expensive then'

that won't either ;)

Wed, 08/19/2015 - 21:37 | 6445789 CHC
CHC's picture

Howee kowl!

Wed, 08/19/2015 - 21:45 | 6445804 The Ingenious G...
The Ingenious Gentleman's picture

To me the key words here are: "as investors pull out of the yuan".
What's more important in the grand scheme - export competitiveness or preventing a yuan sell-off.

Wed, 08/19/2015 - 21:59 | 6445828 mayhem_korner
mayhem_korner's picture

 

 

Last week's oxycontin didn't do it...back to the crack.

Wed, 08/19/2015 - 22:25 | 6445901 buttmint
buttmint's picture

...guess the "rods of god did the trick....

What's next....? Mauled horses dropping from the sky?

 

sarc/

Thu, 08/20/2015 - 02:17 | 6446271 benb
benb's picture

The Syndicate made China an offer it couldn't refuse. And apparently the Syndicate controls the spaced based kinetic weapons.

Tianjin explosion carried out by Pentagon space weapon in retaliation for Yuan currency devaluation... Learn more: http://www.naturalnews.com/050816_Tianjin_explosion_space-based_weapons_military_retaliation.html#ixzz3j6UYp0zm

 

 

Wed, 08/19/2015 - 22:48 | 6445964 wains
wains's picture

Pboc acts like they're making stew.....more Worcestershire more Worcestershire.....ah fukk too much.  Pour more water in.....

Wed, 08/19/2015 - 23:03 | 6446001 DeepFriedLizards
DeepFriedLizards's picture

Going down baby.  "A little chop" my ass.  Even Hicks is awake.

Thu, 08/20/2015 - 01:06 | 6446190 EurGold
EurGold's picture

Buy Gold, Silver, Platinum and Palladium with Bitcoin, Litecoin, multiple other cryptocurrencies and bank wire!!

 

https://www.eurgold.eu

Thu, 08/20/2015 - 01:45 | 6446238 ebworthen
ebworthen's picture

Wait...weren't they devaluaing the Yuan?

I'm so confused...Bo-Bo Platter or Rat on a Stick?

Thu, 08/20/2015 - 07:12 | 6446448 EconoIdiot
EconoIdiot's picture

I so now confused by you people...

 

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