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Lombard Odier argues the hurdle for a major yuan devaluation remains high because the PBOC targets the currency's value rather than inflation. A large decline would require either a market-determined outcome or deliberate intervention, and the bank sees stability as more likely.
Limited odds of a large devaluation suggest Chinese import costs for US farm goods are unlikely to shift sharply, so the near-term price effect on soybeans and feed grains is modest.
lombardodier.comVasileios Gkionakis, PhD, Homin LeeJun 4, 2019After 169 past neutral macro events, Chinese Yuan (CNY per USD) moved a median +0.0% over 5 sessions (50% higher; middle half -0.3% to +0.2%), and -0.0% over 20.
After 50 past neutral macro events, Soybeans moved a median -0.3% over 5 sessions (48% higher; middle half -2.2% to +1.3%), and -0.8% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
