FX Commentary

Risk is firm on the last trading day of the year, supported by a fresh low China fix. The up-tick in China HSBC manufacturing PMI to 48.7, from 47.7 in November also kept sentiment supported. CNY was the focus in $Asia after a much lower than expected fix into the year-end at 6.3009. YTD CNY appreciation stands at ~4.9% - close to the 5% pace that many had been expecting. Post fix, the $Cny NDF curve opened a big figure lower with a brief round of $ supply seen, likely on the back of Cnh/Cny spread unwinds. Front-end Cny (mostly in the 1-3mth tenors) then saw good $ short-covering interest on profit taking from macro names with 1s Cny briefly touching 6.3380 high.  After lunch-break, however, the Ndfs were under renewed pressure driven by onshore UsdCny spot selling by corporate names, with little trading in the Ndfs directly.