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BoC intervenes strongly in the foreign exchange market, Hong Kong stocks rebounded due to inflow of funds👀
Over in China, the PBoC has been intervening in FX markets, with the CNY seeing the 2nd strongest fix versus Bloomberg survey on record (with ~918 pips to the strong side), squeezing out some late USDCNH longs as spot CNH squeezed from 7.35 down to 7.28 as of the time of writing. Furthermore, the PBoC published its 23Q2 Monetary Policy Report yesterday, in the midst of the recent rapid RMB depreciation. Outside of the consistent rhetoric with the Politburo's earlier guidance to "enhance the magnitude of macro policy adjustment", the MPR also explicitly mentioned to "firmly prevent exchange rate overshooting risks" (堅決防範匯率超調風險) as an official guideline for the very first time. Finally, official and state-supported buying in Chinese stocks / H-shares was also evident yesterday, with significant southbound flows recorded in the HK-Connect yesterday, and HSI rebounding from a ~2% sell-off intraday to close flattish versus the previous session.
