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The Pakistan Army stated that the negotiations over the past 24 hours have made encouraging progress and taken an important step toward reaching a final agreement.On May 23, the Financial Times reported that mediators believe the US and Iran are close to reaching an agreement to extend the ceasefire by 60 days and lay the foundation for discussions on Irans nuclear program. According to senior sources familiar with the negotiations, the agreement would include a phased reopening of the Strait of Hormuz and a commitment to consult on the dilution or transfer of Irans highly enriched uranium stockpiles. The US would also ease its blockade of Iranian ports, agree to sanctions waivers, and phase out the freezing of Tehrans assets held overseas. A diplomat familiar with the negotiations stated, "The agreement seems to be moving in the right direction. It has been submitted to the US for review, and Iran is likely prepared to make further concessions on the nuclear issue." These signs of progress are attributed to a series of key meetings held by negotiators from Pakistan and Qatar with their Iranian counterparts on Thursday and Friday.On May 23, Iranian Foreign Ministry spokesman Baghae stated that the core purpose of Pakistani Army Chief of Staff Munirs visit to Iran was to convey and exchange specific information between Iran and the United States. He said, "At this stage, all our core focus is on ending this war of imposition." Baghae indicated that the two sides have held several rounds of intensive exchanges of views on different clauses in the proposal. They have also conducted in-depth discussions on issues where they have serious disagreements. Given the consistently contradictory stance of the United States, Iran cannot currently assert that this negotiation process will undergo a fundamental change. He said, "Our views have indeed converged somewhat, but this does not mean an agreement has been reached; it merely allows us to explore a possible solution."On May 23, an Iranian Foreign Ministry spokesperson stated that the current mediation process with the United States is "time-consuming and laborious" because the USs hostility dates back decades. "We discussed some key points and wording where disagreements remain, and made suggestions, some of which are still under review, with all parties expressing their opinions," the Islamic Republic News Agency quoted Bagae as saying. Bagae also thanked Pakistan for its mediation efforts.Iranian Foreign Ministry Spokesperson: We are currently focused on finalizing the memorandum of understanding with the United States. Over the past week, the two sides have been getting closer, and we must wait and see what happens in the next three or four days.

Despite contradictory inflation indicators from China, USD/CNH recovers to approximately 6.7700

Daniel Rogers

Jan 12, 2023 14:43

USD:CNH.png 

 

After dipping to roughly 6.7550 during the Asian session, the USD/CNH pair has risen. Despite China's National Bureau of Statistics (NBS) releasing contradictory Consumer Price Index (CPI) data for December, the asset has recognized demand and extended its recovery to near 6.7700.

 

The annual CPI has remained unchanged at 1.8%, which is in line with forecasts and higher than the prior statement of 1.6%. In contrast, the price index at the factory gate has decreased dramatically, indicating that producers have less negotiating power. In contrast to forecasts, the Producer Price Index (PPI) decreased by 0.7% rather than 0.1%.

 

The swiftness with which the Chinese government reopened the economy after a lengthy suspension to combat the Covid-19 epidemic has instilled optimism among market participants. The market anticipates a sharp improvement in economic prospects and foreign trade.

 

Morgan Stanley analysts have increased their forecast for China's Gross Domestic Product (GDP) this year to above 5%. "If policy can reduce obstacles to the housing/property sectors and COVID zero recovery, China's economic recovery should strengthen beginning in the second quarter of this year," they added.

 

In the interim, risk-sensitive assets are performing well due to investors' enhanced risk appetite, as indicated by the S&P 500 futures' string of weekly increases. The 10-year US Treasury rates have decreased to 3.55 percent due to optimistic market attitude. The US Dollar Index (DXY) has encountered resistance above 102.80 and has swung to the south in advance of U.S. inflation data.

 

Analysts at Wells Fargo believe that a further decline in energy costs will weigh on the headline and balance price rises in food and core services. However, the price decrease will also be assisted by a further decline in core products, led by used autos once more.