EM ASIA CREDIT: Malayan Banking Berhad: New USD mandate FV

• The PBOC issued CNY137.8bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY 0 bn.
• Net liquidity injection CNY137.8bn.
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.40%, from prior close of 1.39%.
• The China overnight interbank repo rate is at 1.31%, from the prior close of 1.30%.
• The China 7-day interbank repo rate is at 1.40%, from the prior close of 1.35%.

Ethereum had a range Friday night of $3489.99 - $4392.39, Asia is trading around $4150, +0.25%. Ethereum like the rest of Crypto capitulated on Friday down over 20% at its lows. The pullback from $3500 has been just as brutal as US/China rhetoric is seemingly being walked back. After what some have called the largest drawdown in Crypto history it is tough to think the market will just shrug this off and go straight back to making new highs. I suspect accounts that managed to stay in will use bounces to at least lighten up positioning until we truly understand how the US/China situation plays out.

• Look for some choppy markets as price tries to consolidate within a $3500-$4800 range.
• The price action certainly again highlights the risk for crypto investors in vehicles that promise liquidity which is always ample when people get in, but is never there when there is a need to exit. This is especially true for all the ALT-Coins who had even bigger write downs.
• The margin and leveraged accounts will have all been taken out, so where does that next wave of fevered buying come from which is needed to keep feeding the machine.
• Zerohedge posted on X: “Total annihilation of spec/levered positions”

Fig 1: Ethereum spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The USD/CNY fix printed at 7.1007, versus a BBG market consensus of 7.1234. The lower fixing outcome (Friday's print was 7.1048), will re-affirm the markets view that the authorities are prioritizing yuan stability amid renewed US-China trade tensions. This was a fresh low in the fix back to Nov last year. USD/CNH is lower post the fix, albeit marginally, last near 7.1330/40. We were already trending lower prior to the fix from above 7.1400. (Friday highs were close to 7.1500). Downside focus is likely to rest at lows from late last week near 7.1240. 

•  The fixing error was slightly tighter at -227pips, versus -290pips on Friday.