Equity Outperformance Falters, USD/CNH Gets Close To 6.9000

(MNI Australia) USD/CNH got above 6.8960 post the Asia close, before selling interest capped the move. Dips back to 6.8800 were supported and we currently track in the 6.8830/40 region. This left CNH 0.23% weaker for Monday's session. The CNY NEER also continued to track lower, down 0.24% to 125.22 (J.P. Morgan Index).

• Like elsewhere, the rebound in US yields (with the 2yr back close to 4%) weighed on CNH. USD/CNH is still broadly tracking yield differentials with the US at this stage.
• There was also underperformance by China in the equity space. The Golden Dragon Index fell 1.20% during US trade on Monday. This came after onshore equities lost ground yesterday (-0.36% for the CSI 300). There was modesty Northbound stock connect outflows for the second straight session.
• Premier Li Qiang stated China will open wider to the outside world and give space for offshore companies to develop locally, according to state TV. The Premier will also attend the Boao Forum in Hainan on March 30, with leaders from Singapore and Malaysia also in attendance.
• The other focus point late yesterday was the return of Alibaba co-founder Jack Ma to his home town of Hangzhou (Ma has largely been out of the public eye since late 2020). This caused a brief blip higher in Alibaba's share price but it wasn't sustained.
• A focus point for the market continues to be how the government will foster development of the private sector.