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CNH Underperforms USD Weakness, CNY NEER To Fresh Lows

CNH

USD/CNH got just short of 7.1360 late in Asia Pac trade on Monday, before pulling back sub 7.1100 in NY trade, as the weaker ISM Services print weighed on broader USD sentiment. USD/CNH was back close to 7.1200 by late in the NY session, leaving CNH 0.14% weaker for Monday's session. USD/CNY finished close to 7.1025, while the CNY NEER (J.P. Morgan index) fell 0.32%, to fresh lows of 122.72, as the yuan underperformer the broader dollar pull back.

  • The data calendar is empty today, with May trade figures on tap tomorrow, where market expectations see weaker export growth, but a still very large trade surplus.
  • In the equity space, the Golden Dragon index lost 0.45% in US trade, amid softer sentiment in US/EU equities. To recap, the CSI 300 lost 0.45% yesterday, while Morgan Stanley cut its target for the MSCI China index to 70 from 80.
  • Some disappointment was evident yesterday around lack of fresh news around proposed property stimulus measures. Property related stocks unwound some of their Friday bounce.
  • Elsewhere, the authorities stated that local government debt risks are manageable and urged local authorities to tackle debts (via the Xinhua News agency).

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