The People's Bank of China intervened strongly in the foreign exchange market, and Hong Kong stocks rebounded due to southbound funds👀
In China, where the People's Bank of China has been intervening in the foreign exchange market, the yuan has seen its second-strongest fixing in history (a difference of 918 points) compared to Bloomberg's market forecast. As of this writing, spot USD/CNH has gone from 7.35 fell to 7.28; in the context of the recent rapid depreciation of the RMB, the People's Bank of China released its second quarter monetary policy report yesterday. In addition to the previous consistent slogan of "increasing macro policy adjustments", the Monetary Policy Committee clearly mentioned for the first time "resolutely "Prevent the risk of exchange rate overshooting" as official guidance; in addition, the official buying of Chinese stocks/H shares was also obvious yesterday. Hong Kong Stock Connect saw a large amount of southbound capital inflows yesterday, and the Hang Seng Index rebounded from an intraday drop of about 2%. Eventually ended up flat.
