CNH Outperforms USD Rebound

USD/CNH didn't re-visit late Asian session lows from yesterday near 7.0200, as the pair rebounded back to 7.0800 during NY trading. We finished the NY session back close to 7.0400 though and the China currency outperformed broader USD gains elsewhere (BBDXY +0.23%). The CNY NEER (J.P. Morgan Index) was up 0.33% for Monday's session.

• The meeting between China President Xi Jinping and US President Biden appeared to see some thawing of tensions. US Secretary of State Blinken will visit China next year, while dialogue between senior officials across a range of issues (climate change, debt relief, economic stability etc) will also resume.
• China's Golden Dragon Index ended the US session just in positive territory, outperforming weaker trends in major US indices. Yesterday China equities gave up strong early gains to finish mixed. The CSI 300 up 0.15%, but the Composite Indices were lower.
• Elsewhere the focus will be on today's MLF decision, with no change expected in the rate (2.75%), while volumes are expected at 1000bn yuan. October activity prints are also due (see this link), with easing momentum expected across IP and retail sales. As we noted yesterday though, the market may look through modest downside surprises given recent announcements on CZS and fresh property sector support measures.