CNY trading hours could be extend by November

There were reports yesterday that trading hours for the CNY will be extended to GMT 15:30 (23:30 local time) by end-November. At present, the market closes at GMT 08:30 (4.30pm local time). 

Separately, there were also reports that China plans to issue CNY-denominated sovereign bonds in London. This would be the first offshore issuance outside of Hong Kong. It also comes ahead of President Xi Jiping's visit to the UK on 19 October. The proposed changes come as China pushes for CNY inclusion in IMF's SDR basket. 

In August, IMF highlighted several operational issues including 1) short trading hours for CNY; 2) divergence between CNY and CNH; and 3) illiquid onshore rates market. 

"This makes it difficult to conduct routine SDR operations, such as calculations of exchange and interest rates. For USD-CNY, it gained for the 2nd session yesterday by 0.1% to 6.3482 despite the softer USD tone. This followed the soft CPI and PPI inflation reports which left the door open for further targeted monetary stimulus to stabilize growth", notes Commerzbank. 

PBoC's mid-point fix today was set at 80 pips lower than yesterday's close but USD-CNY is holding steady at the open at 6.3482.