EM LATAM CREDIT: "Fitch Revises Banco Pan's Outlook to Positive;'" - Fitch/BBG

USD/CNH spiked from sub 7.2500 to above 7.2900 late in Wednesday Asia Pac trade, following a Rtrs report that China was considering a weaker yuan in 2025 to counter the tariff threat from the returning Trump administration. We track just under 7.2800 in early Thursday dealings, after losing 0.29% on Wednesday. Spot USD/CNY finished up at 7.2631, while the CNY CFETS basket tracked higher to 100.07 (up 0.38%) per BBG. 

• The Financial News (which is backed by the PBoC) stated that the yuan has a solid foundation to remain basically stable late on Wednesday, per BBG. It noted that it may see volatility in both directions though (see this link).
• State banks were also reportedly USD sellers when onshore spot spiked above 7.2650 yesterday, per BBG.
• For USD/CNH, dips sub the 20-day EMA have been supported in recent sessions. This rate comes in around 7.2540. On the topside, recent highs rest above 7.2900.  
• The local data calendar is quiet, although we still await the Nov aggregate finance, new loans data. The annual economic working group meeting is also expected to continue today.
• Late yesterday it was reported that the US Biden administration would put tariffs on import materials from China (per FT/BBG).

The NZGB curve has twist-steepened this morning, yields are -0.5bps to +1.5bps and is outperforming the moves made overnight in US tsys which sure yields rise 1 to 6.5bps.

• The Tsys curve bear steepened, with the short-end outperforming after in-line CPI data pointed to a Fed cut next week. Core CPI inflation was a little stronger than expected in November at 0.31% M/M (cons 0.28), but housing inflation - whose stickiness has been a concern for Fed policymakers - pulled back more sharply than expected, helping shift implied probability of a 25bp cut next week to near 100% versus <90% Tuesday.
• New Zealand's retail card spending remained flat in November, following a revised 0.7% increase in October. Total card spending declined 0.1% m/m after a revised 0.2% gain previously. Fuel outlet sales rose 1.3% m/m, while core sales edged up 0.1% m/m.
• With little on the data calendar locally, focus in the region today will now turn to Australia's employment data due out in a few hours, with consensus for a gain of 25k jobs, with the unemployment rate to edge up to 4.2% from 4.1%.
• The RBNZ dated OIS is steady this morning 43bps of cuts priced in for the Feb meeting, and a cumulative 108bps of cuts priced in through to October 2025.
• NZGB curves are trading just off their steepest levels for the year, the 3s10s steepened the most trading +3.3bps at 58.90 while the the 5s10s +2.5bps at 44bps.
• The 2yr is outperforming this morning and is now trading at its lowest yield since Sept 2022, last -0.2bps at 3.711%, while the 10yr is +1.3bps at 4.342% vs 2024 lows of 4.068%.
• Swaps are steady this morning, trading little changed.
• There will be a 2028, 2035 &  2037 bond auction later today.

• NZD/USD closed 0.24% lower at 0.5785 on Wednesday, making fresh new yearly lows in the process. The move lower has tracked a steep sell-off in China's yuan, after reports that China will consider letting its currency fall in 2025.
• The pair hovers near its two-year low at 0.5772, reflecting a bearish trend within a descending channel. It trades below all key EMAs, signaling bearish momentum, with the RSI nearing oversold territory at, currently at 36.
• Immediate support lies at 0.5772 (2023 lows), a break here and the next major support isn't until the 2022 lows at 0.5500. Resistance levels are seen at 0.5872 (20-Day EMA), a break above here and 0.5900 becomes the target.
• The OIS market has 43bps of cuts priced in for the Feb meeting in line with Wednesday. There is a cumulative 108bps of cuts priced in through to October 2025.
• The NZ-USD 2yr swap was steady on Wednesday after hitting a low of -60bps last week, before a slight bounce to hold at -53bps right now.
• New Zealand's retail card spending remained flat in November, following a revised 0.7% increase in October. Total card spending declined 0.1% m/m after a revised 0.2% gain previously. Fuel outlet sales rose 1.3% m/m, while core sales edged up 0.1% m/m.
• Later today we have some NZGB auctions. There is little else on the calendar today with focus turning to tomorrows BusinessNZ Manufacturing PMI