CNY: Still bearish? - Rabobank

CNY has surprised many in H1 2017 with its strength vs. USD but analysts at Rabobank still remain bearish for a variety of reasons which primarily includes the high debt issues of the economy.

Key Quotes

“We’ve been here before with failed CNY rallies; China’s debt issue is still there to worry about; so are growing problems in the financial sector; and so is the backdrop of US rate hikes and President Trump.”

“Just look at China’s inverted sovereign yield curve, or the negative spread between Chinese banks 1-year lending rates and 1-year SHIBOR and try argue that the CNY is ‘strong and stable’ at current levels.”