CNH: USD/CNY Fixing Edges Higher, Error Term Unchanged

The USD/CNY fix printed at 7.1161, versus a BBG market consensus of 7.1527.

• This was a fresh low in the fixing back to Nov 6 last year. The fixing error remained negative at -366pips, but was tighter than Friday's -553pip outcome.
• USD/CNH is lower post the fixing outcome, last close to 7.1650, which is fresh lows back to late July.
• Broader USD sentiment is slightly firmer in the first part of Monday trade with JPY off around 0.20%, as US Tsy yields edge higher after Friday's sharp move lower. 

• CHINA SETS YUAN CENTRAL PARITY AT 7.1161 MON VS 7.1321

In Tokyo morning trade, JGB futures are little changed, -1 compared to settlement levels, after giving up Friday’s overnight gains. 

• (Bloomberg) -- Bank of Japan Governor Kazuo Ueda said he expects a tight labor market to keep upward pressure on wages, reflecting his view that stable inflation is set to take hold.
• “Wage growth is spreading from large enterprises to small and medium enterprises,” Ueda said Saturday in remarks at the Federal Reserve’s annual symposium in Jackson Hole, Wyoming. “Barring a major negative demand shock, the labor market is expected to remain tight and continue to exert upward pressure on wages.”
• Cash US tsys are ~1bp cheaper in today’s Asia-Pac session after Friday’s strong rally.
• Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is 0.6bp lower at 1.618% versus the cycle high of 1.627%, set last week.
• Swap rates are 1-2bps higher. Swap spreads are wider.