CNH: USD/CNY Fixing Edges Up, Fixing Error Close To Unchanged, CNH Steady

The USD/CNY fix printed at 7.1106, versus a BBG market consensus of 7.1157. 

• Today's fixing was down slightly on Friday's outcome. The market estimate was also lower, while the fixing error was little changed at -51pips.
• As expected, the loan prime rates were left unchanged earlier.
• USD/CNH is down a touch so far today, last near 7.1160. 

There is a lot of discussion going on with regards to the merits of Trump's H-1B visa fee, initially seen as a negative due to it reducing cheap access to many of the software engineers being brought in from both India and Asia. There are some who see it as something that has needed to be addressed for quite some time and see benefits to the US tax payer as a result. There was some early focus today on its impact on US equity futures. We are lower but only marginally, with Nasdaq and Eminis off by around 0.1% at this stage. Below are a compilation of excerpts that touch on the issue:

• Michael W. Green on Substack: “The current system creates market distortions that hurt American workers, mislead policymakers, and ironically harm the very immigrants it claims to help.”
• “A $100,000 H-1B fee is not about closing doors. It is about aligning costs, restoring price discovery, and ensuring immigration serves the national interest. With segmentation, reverse Dutch auctions, and reinvestment of proceeds, the system could raise wages, ease housing stress, strengthen education, and renew cooperation between firms and schools.”
• Reed Hastings(Co-Founder of Netflix, CEO Powder) on X: “I've worked on H1-B politics for 30 years.  Trump's $100k per year tax is a great solution.  It will mean H1-B is used just for very high value jobs, which will mean no lottery needed, and more certainty for those jobs.”
• Bloomberg - “Trump’s $100,000 H-1B visa is a big gamble on US jobs, Patricia Lopez writes. While it tilts the playing field toward American workers, answering critics who complain that companies are addicted to hiring cheaper foreign labor, the prevailing-wage rules may be prohibitive enough to tank the whole program.”

The S&P(ESZ5) overnight range was 6679.50 - 6731.50, SPX closed +0.49%, Asia is currently trading around 6718. Another day and another all-time high, nothing stops this train. This morning US futures opened slightly lower, E-minis(S&P) -0.15%, NQZ5 -0.15%. The stock market continues to look way overdone and is in what is supposed to be a difficult seasonal period. Yet it remains in an uptrend and continues to confound the bears by making new all-time highs and there does not look to be any imminent signs of a correction yet, dragging an underweight institutional market back in. 

• Bloomberg - "Trump’s $100,000 H-1B visa is a big gamble on US jobs, Patricia Lopez writes. While it tilts the playing field toward American workers, answering critics who complain that companies are addicted to hiring cheaper foreign labor, the prevailing-wage rules may be prohibitive enough to tank the whole program."
• Lance Roberts on X: "Despite the function of time...the amount of liquidity still in the system following the 2020 splurge is still very elevated which is why retail spending continues to hold up despite signs of economic constraints.” 
• ISABELNET on X: "S&P 500 - The Fed cutting interest rates while stocks are at record highs and the economy is still growing creates a bullish setup for equities, boosting investor optimism about future returns.”
• Barchart on X: “Only one other time in history has the Federal Reserve cut rates without falling earnings. That led to the Dot Com Bubble." See Graph Below.

Fig 1: S&P EPS vs Fed Funds Rate

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