• Chinese state media tabloid Global Times says metal export curbs a warning to US, allies
• Offshore yuan has weakened after the PBOC set the CNY stronger again
• China’s former vice Commerce Minister says China’s export control measures just a start
• China June 2023 Caixin / S&P Global Services PMI 53.9 (prior 57.1)
• PBOC sets USD/ CNY central rate at 7.1968 (vs. estimate at 7.2180)
• Coming up from the Federal Reserve Wednesday, 5 July 2023: FOMC minutes, Williams speaks
• Chinese state approved financial media says there is space for more monetary policy easing
• Japan Jibun / S&P Global Services PMI for June 54.2 (prior 55.9)
• The de-dollarization hype – misinformed, misunderstood, self-serving – and wrong
• Morgan Stanley Chief Global Economist says US soft landing ahead, recession is avoidable
• BoA expects a softer USD in the next 18 months, not optimistic on tech driven productivity
• Australia data – June Services PMI 50.3 (prior 52.1)
• Société Générale forecast USD/CNY as high as 7.40
• China has cancelled a trip by European Union’s Borrell scheduled for next week
• ICYMI: German Econ Minister Habeck says China limiting lithium supply would be a problem
• Bridgewater CIO says its an awful idea to use ChatGPT, other language bots, to pick stocks
• Krugman says US economy strong: low unemployment, falling inflation. Cites reduced misery.
• Trade ideas thread – Wednesday, 5 July 2023
• Forexlive Americas FX news wrap: Commodities rally with the US out for holiday

It
was a very subdued session following on from the US Tuesday 4 July
holiday. Fresh news flow was virtually non-existent. We did get
Service PMIs from Japan and China, both of which declined in June
from May but which nevertheless remained in expansion.

The
People’s Bank of China set the CNY stronger than expected in the
reference rate today. Offshore yuan strengthened alongside but that
was soon reversed as traders scooped up USD/CNH on the dip. The USD
is mixed to a little higher pretty much across the board as I post.

Still
to come today we have US markets reopening after the day off along
with Federal Open Market Committee (FOMC) meeting minutes and NY Fed
President Williams speaking.

USD/CNH update, it dipped briefly on the PBOC CNY reference rate setting and then rallied sharply higher for the session: