USD/CNY: market feels bid - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that the market feels bid in USD/CNY.

Key Quotes:

"Likeliest explanation Chinese corporate demand for dividend payments. Many in markets have also interpreted widely discussed "authoritative" articles in the People's Daily as suggesting more official acquiescence to a softer currency."

"We, however, are not sure they signal any great policy shift (at least not yet); they could even be principally about Beijing policy disagreements (12 May call note). Our advice to traders is always to watch what they do far more than what they say. While we previewed April activity indicators last week, they may already be a little dated."

"Activity in May in sectors that drove the recent rebound - residential construction and infrastructure - may already be slowing, judging by movements in copper, rebar and iron ore prices."