GDP Data At The Fore After PBoC Disappoints

USD/CNH has shown little in the way of post-RRR cut reaction, even though the PBoC under delivered vs. wider expectations on Friday.

• As a reminder, there was a shallower than expected headline 25bp RRR cut from the PBoC after hours on Friday, which covered those banks not already at the RRR lower bound of 5%, while an extra 25bp RRR cut was afforded to select city and rural commercial banks that have an RRR of above 5% (releasing ~CNY530bn of liquidity in total).
• Meanwhile, wider focus continues to fall on China’s localised COVID-related mobility restrictions, with more areas adopting restrictions in recent days (although Shanghai has published its road map to move out of its current state of restrictions).
• Chinese Q1 GDP data headlines the domestic docket on Monday, while March economic activity data is also due. Note that Xinhua has seemingly attempted to run a reassuring commentary piece this morning, pointing to a stable economy operating within a reasonable range during Q122. The piece noted that country’s long-term sound fundamentals remain in place, while noting that the country has the ability to meet its ’22 GDP target, although the piece reaffirmed the idea that more effort is required on that front.
• USD/CNH last deals comfortably within the recent range, just below CNH6.3850. Initial resistance lies at the March 15 high (CNH6.4108), while support is seen at the March 31 low (CNH6.3452)