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CNY Basket Back To Lows Seen In March, USD/CNH Support Sub 7.2700

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USD/CNH tracks near 7.2740 in early Tuesday dealings, little changed for Monday's session as a whole. Dips in the pair sub 7.2700 were supported, while earlier Monday highs were just above 7.2860. Onshore USD/CNY spot finished up at 7.2583, a yuan loss of just over 0.11%. The CFETS Yuan index tracker continued to be biased softer, now at lows going back to March (per BBG).

  • BBG noted USD demand was strong onshore yesterday, with state banks selling USDs to curb the move. Liquidity was also tighter in the offshore CNH market, the 1 week CNH implied yield rising above 4% to highs last seen in April.
  • The bias around the USD/CNY fix should arguably be higher today, given mostly positive USD index gains, while the official onshore 4:30pm close was 7.2627 versus 7.2585 from Friday.
  • Yesterday's data outcomes will keep policy stimulus calls in place, while Goldman Sachs nudged down its 2024 GDP forecast to 4.9% (from 5.0%). China yields finished slightly up in the 2yr space, while the 10yr has moved off recent highs of 2.30%, last around 2.25%.
  • China equity sentiment was a touch firmer (CSI 300 up 0.11%), but markets are awaiting the Third Plenum outcome.
  • The local data calendar is fairly quiet until Friday's FX settlement figures.
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USD/CNH tracks near 7.2740 in early Tuesday dealings, little changed for Monday's session as a whole. Dips in the pair sub 7.2700 were supported, while earlier Monday highs were just above 7.2860. Onshore USD/CNY spot finished up at 7.2583, a yuan loss of just over 0.11%. The CFETS Yuan index tracker continued to be biased softer, now at lows going back to March (per BBG).

  • BBG noted USD demand was strong onshore yesterday, with state banks selling USDs to curb the move. Liquidity was also tighter in the offshore CNH market, the 1 week CNH implied yield rising above 4% to highs last seen in April.
  • The bias around the USD/CNY fix should arguably be higher today, given mostly positive USD index gains, while the official onshore 4:30pm close was 7.2627 versus 7.2585 from Friday.
  • Yesterday's data outcomes will keep policy stimulus calls in place, while Goldman Sachs nudged down its 2024 GDP forecast to 4.9% (from 5.0%). China yields finished slightly up in the 2yr space, while the 10yr has moved off recent highs of 2.30%, last around 2.25%.
  • China equity sentiment was a touch firmer (CSI 300 up 0.11%), but markets are awaiting the Third Plenum outcome.
  • The local data calendar is fairly quiet until Friday's FX settlement figures.