CNH Gains +1%, NEER Back Close To YTD Highs

CNH rose just over 1% for Wednesday's session. USD/CNH continued to move lower post the Asia close, with yesterday's PMI beats weighing on the pair. We got to the 6.8630/35 region in the NY session, but stabilized from there amid a higher US yield backdrop, last back close to 6.8730/40. The CNY NEER (J.P. Morgan index) rose 0.60% on Wednesday, leaving the index back at 126.51. This is close to YTD highs.

• Note Wednesday session lows in the pair coincided with the 200-day EMA (6.8636), while the 20 (6.8750) and 50 (6.8766) day EMAs sit nearby relative to current spot levels.
• The Golden Dragon index rose just over 3% in US trade, following solid gains in onshore equity indices yesterday. Northbound stock connect flows were +7bn yuan for yesterday's session. This was the first daily inflow since last Tuesday (21 Feb).
• The local data calendar is quiet until tomorrow's Caixin Services PMI prints.
• Bloomberg reported yesterday that the China authorities have been surprised by the pace of the economic recovery, largely due to the Covid wave peaking earlier than expected. This is something that is likely to have been reinforced by yesterday's PMI beats. In turn this may limit additional further stimulus measures, at least in the near term (see this link for more details).