Commodity Currencies Hit As GBP Gains

A negative note to kick off the week, a softer set of official China PMI figures has sapped risk appetite, and sees commodity currencies lead the way lower in early Asia trade.

• AUD & NZD are the bottom of the G10 pile so far. China PMI weighs, as does the announcement that a new COVID-19 case in Perth has resulted in a 5 day lockdown for the city.
• JPY is slightly firmer against most crosses on safe haven flows. The key concern continues to be the extension of coronavirus containment restrictions, the decision has not yet been made and conflicting commentary has emanated from various outlets about the duration and severity of any declarations. Japan manufacturing PMI for January 49.8, dropping back into contraction.
• The PBOC sets USD/CNY mid-point at 6.4623, 21 pips higher than sellside estimates. The bank injected CNY 98bn into the financial system, the same amount as Friday. Repo rates have declined from the multi-year highs hit last week. USD/CNH last down 54 pips at 6.4468, despite softer official PMI figures from China.
• GBP is higher, there were reports over the weekend that the UK wants to join the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership free trade agreement in the Asia-Pac region.