News

South Korea S&P Global Manufacturing PMI remains unchanged at 49.4 in November

Japan Jibun Bank Manufacturing PMI came in at 48.7, below expectations (48.8) in November

People’s Bank of China USD/CNY reference rate is due around 0115 GMT.

The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.

How the process works:

• Daily midpoint setting: Each morning, the PBOC sets a midpoint for the yuan against a basket of currencies, primarily the US dollar. The central bank takes into account factors such as market supply and demand, economic indicators, and international currency market fluctuations. The midpoint serves as a reference point for that day’s trading.
• The trading band: The PBOC allows the yuan to move within a specified range around the midpoint. The trading band is set at +/- 2%, meaning the yuan could appreciate or depreciate by a maximum of 2% from the midpoint during a single trading day. This range is subject to change by the PBOC based on economic conditions and policy objectives.
• Intervention: If the yuan’s value approaches the limit of the trading band or experiences excessive volatility, the PBOC may intervene in the foreign exchange market by buying or selling the yuan to stabilize its value. This helps maintain a controlled and gradual adjustment of the currency’s value.

This article was written by Eamonn Sheridan at investinglive.com.

Optimism in the UK services sector fell at its fastest pace in three years in the three months to November, as persistent cost pressures squeezed profitability, according to the Confederation of British Industry. The CBI’s services optimism index slid to –50, down from –29 in August, while service volumes also weakened.

The industry is unlikely to find relief from the government’s 26 billion-pound tax package unveiled in Chancellor Rachel Reeves’ November 26 budget, the CBI said. Charlotte Dendy, head of economic surveys, warned that the budget “adds further costs to businesses,” including higher national insurance charges on salary-sacrifice pension contributions and no action on elevated energy costs.

A separate survey from the Institute of Directors painted a similarly bleak picture. Business sentiment improved only marginally after the budget, rising to –72 from –73 in early November, keeping confidence near record lows. The IoD survey primarily reflected smaller firms, with two-thirds of respondents employing fewer than 50 people.

This article was written by Eamonn Sheridan at investinglive.com.

Australia’s Melbourne Institute inflation gauge rose 0.3% in November, matching the previous month,

• the annual measure edged up to 3.2% from 3.1%

more to come

The data indicate domestic price pressures remain sticky, with underlying momentum still running above the Reserve Bank of Australia’s 2–3% target band.

This article was written by Eamonn Sheridan at investinglive.com.

Traders are increasingly expecting a rate cut in the upcoming U.S. Fed meeting on Dec. 10.

Australia TD-MI Inflation Gauge (YoY) rose from previous 3.1% to 3.2% in November

South Korea Trade Balance came in at $9.735B, above expectations ($8.4B) in November

Australia TD-MI Inflation Gauge (MoM) remains at 0.3% in November

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