Quotes from Societe Generale Cross Asset Research:
-In emerging markets, the flash China HSBC manufacturing PMI released earlier today marked the return of the Chinese markets after the New Year holidays. The PMI rose to 50.1 from 49.7, returning over the 50-level for the first time in four months. This still keeps the door open for further easing in monetary policy by the PBoC.
-The first day of the New Year was marked by a 0.6% fall in Shanghai composite and a fall in USD/CNH to 6.2623. Chinese banks reportedly sold $17bn in FX in January, and this, following the $19bn sold in December, suggests that the PBoC is probably selling dollars to support the yuan.
-Elsewhere, the TRY strengthened after the Central Bank of Turkey resorted to a measured approach yesterday and cut its key rate by 25bp to 7.50%.
