0301 GMT — China will likely take countercyclical interventions to support the yuan after the country’s foreign direct investment turned negative for the first time since the data were released in the 1990s, OCBC analyst Tommy Xie says in a research note. The deficit was mainly due to direct investment outflow driven by an accelerated repatriation of retained earnings by foreign corporations, Xie says. As the deficit is poised to weigh on the yuan, he anticipates a sustained strategic response from China’s authorities including the daily fixings and the management of CNH liquidity to stabilize and support the currency’s valuation. USD/CNY is at 7.2827, according to FactSet. ([email protected])

NZD/USD May Have Found Floor

1939 GMT — The NZD/USD is at 0.5995 early Monday, having jumped higher at the end of this week following a softer-than-expected U.S. labor report. “Hopes of a soft landing remain high, but because that’s been accompanied by a sharp fall in U.S. bond yields, it has weighed on the U.S. dollar and spurred on risk assets, with which the NZD is correlated,” ANZ Bank says in a note. It thinks the USD may have now peaked, especially with markets clearly in no mood to embrace a hawkish vibe. “But that doesn’t necessarily mean the USD will keep plummeting, especially if we enter a muddle-through period,” ANZ says. “The U.S. economy isn’t exactly crashing.” ([email protected]; @dwinningWSJ)