Yuan Strengthens Ahead of PMIs

Market Snapshot

Asset	Level	Change
Shanghai Composite	4,069.36	-0.42%
CSI 300	4,754.53	-0.34%
Hang Seng	25,925.65	-0.20%
TAIEX	39,616.63	+1.76%
USD/CNY	6.84	+0.01%
USD/HKD	7.84	+0.02%
Copper	5.98	-0.69%
Brent Crude	104.30	-3.63%
Gold	4,609.60	-1.41%
Bitcoin	76,370.01	-1.29%
China 2Y Govt Yield	-	-
China 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
NBS Manufacturing PMI	50.40	50.20	17:30
NBS Non-Manufacturing PMI	50.10	49.90	17:30
RatingDog Manufacturing PMI	50.80	50.50	17:45

PBOC sets USD/CNY reference rate at 6.8579, bolstering yuan amid forex losses for firms and signals of policy tightening.
Moody’s upgrades China’s outlook to stable, highlighting economic resilience despite challenges from the Iran war and domestic pressures.
Greater China equities mixed: mainland indices ease, Taiwan climbs on tech gains, as commodities weaken on demand worries.

Yesterday's Recap

Greater China markets displayed mixed results on April 27, with mainland equities softening slightly due to profit-taking and yuan firmness impacting export-oriented sectors. The Shanghai Composite ended at 4,069.36, down 0.42%, while the CSI 300 declined 0.34% to 4,754.53, amid caution before key PMI data and persistent property market strains. Hong Kong's Hang Seng index fell 0.20% to 25,925.65, weighed by tech and property stocks despite steady banking performance.

Taiwan's TAIEX outperformed, gaining 1.76% to 39,616.63, driven by robust semiconductor demand and favorable AI-related export prospects. Currencies held firm, with USD/CNY at 6.84 (up 0.01%) and USD/HKD at 7.84 (up 0.02%), supported by PBOC's reference rate moves. China-linked commodities slipped, with copper down 0.69% to 5.98 on industrial demand concerns, Brent crude dropping 3.63% to 104.30 due to Iran war disruptions, gold falling 1.41% to 4,609.60, and Bitcoin easing 1.29% to 76,370.01.

No significant economic releases occurred, but Taiwan's tech sector benefited from stable cross-strait supply chains.

The Day Ahead

Focus shifts to China's April PMI data on April 29, with NBS Manufacturing PMI forecasted at 50.2 (prior 50.4) and Non-Manufacturing PMI at 49.9 (prior 50.1), which could reveal patchy recovery amid subdued global demand. The Caixin Manufacturing PMI, expected at 50.5 (prior 50.8), will offer private-sector perspectives, affecting views on factory activity and PBOC easing prospects. Hong Kong may monitor HKMA alerts on tokens linked to stablecoin issuers, following recent cautions.

Taiwan lacks major releases but will track semiconductor export trends amid geopolitical tensions. Potential State Council updates on property measures could influence mainland stocks. These indicators may spark volatility in CNY and assets if they signal deflation risks, with China's CPI at -0.10% YoY.

Other Economic Notes

Mainland China's recovery contends with yuan gains, amplifying forex losses for exporters and straining profits during a pivot to currency strength. The EV market sees escalating rivalry, as BYD's discounts highlight a deepening price war that may compress margins but aid exports amid domestic weakness. (cont...)

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Other Economic Notes (continued)

Taiwan's semiconductor sector shines, fueled by AI demand, helping mitigate global risks like Iran war-driven energy hikes and supply issues. Hong Kong bolsters its role as a yuan hub with surging offshore debt issuance, drawing investors from Portugal, Finland, and Korea despite peg management challenges. Broader trends include China's block on Meta's Manus AI deal, underscoring tech protectionism that could ripple to regional innovation.

Global Macro News

Worldwide markets grapple with Iran war fallout, revealing China's vulnerabilities via oil price surges and employment strains in reliant industries. The Bank of Japan is poised to maintain rates amid war uncertainties, aiding Asian trade stability for Greater China. US-China ties fray further with Beijing's veto of Meta's $2 billion Manus acquisition, emphasizing AI rivalries that may affect Taiwan's chip exports.

Europe's fiscal shifts, including Germany's openness to easing debt rules, could lift demand for Chinese products, while Morocco reports a MAD 5.1 billion surplus amid mixed global signals. Pakistan anticipates 4% FY26 growth, and the UAE's potential OPEC departure during energy shortages might inflate oil costs, burdening China's imports. Fitch's negative outlook on Taiwan's CPC reflects oil price pressures, paralleling regional energy challenges.

Nigeria's finance reshuffle and Philippines' currency woes mirror yuan volatility dynamics.

Greater China Central Banks Watch

The People's Bank of China set the USD/CNY reference rate at 6.8579, followed by a shift to 6.8589, suggesting tighter policy to reinforce yuan strength amid corporate forex challenges and economic repositioning. No new MLF or LPR changes emerged, with liquidity efforts emphasizing stability over bold stimulus, aligning with State Council resilience goals. The Hong Kong Monetary Authority warned against tokens purporting ties to licensed stablecoin issuers, upholding the USD/HKD peg with steady aggregate balances despite slight FX moves.

Taiwan's Central Bank monitors interventions to limit volatility, holding rates steady while leveraging strong semiconductor exports to counter global risks like the Iran conflict. Regionally, central banks prioritize currency steadiness against external shocks, with PBOC's approach potentially shaping HKMA peg strategies and Taiwan's export policies. The committees opted for continuity in recent decisions.

Greater China Macro Daily(Beta Mode)