Looking Through Latest Property Headlines

USD/CNH proves fairly unreactive to headlines flagging a commentary piece published by the China Economic Times which pointed to the need to adjust home purchase curbs in the country’s large cities.

• As noted earlier, USD/CNH has tried to go lower on a number of occasions today but hasn't seen much follow through. The pair last resides at CNH7.1220, operating in a CNH7.1063-7.1306 band thus far.
• Property stimulus talk has dominated once again, but this has done more for HK equities, rather than mainland China equities, at least at an aggregate level (marginal gains for the Hang Seng vs. marginal losses for the CSI 300, although the latter’s property sector is outperforming the benchmark). This suggests continued scepticism re: the broader economic feedthrough/scale of any impending property sector-based stimulus.
• More broadly, talk of RRR and benchmark interest rate cuts in H223 has also done the rounds via state-run media outlets, in addition to analysts talking up the potential for a credit rebound in the upcoming May data release.
• Elsewhere, A meeting between U.S. and China foreign ministry officials suggests an incremental thawing in tensions, but there wasn't much market impact.