NEER Back To September 2021 Lows

USD/CNH finish the NY session close to 7.2500. This is below yesterday's early Asian session highs near 7.2600, but still comfortably above overnight lows near 7.2000. The CNY NEER (J.P. Morgan Index) continued to fall, down a further 0.56%, bringing losses for the past 3 sessions close to 1.80%. This puts the index back to lows from September 2021.

• Today's data calendar is quiet, with PMIs due tomorrow the next major data focus point.
• Conditions across manufacturing (49.0 forecast versus 49.2 prior) and non-manufacturing (48.0 versus 48.7 prior) are forecast to deteriorate further. Covid related restrictions and weaker external demand are seen as on-going headwinds.
• For today, the focus will be firmly on the domestic covid situation and associated social unrest.
• Overnight the China Dragon index rose 2.83%, although the index remains below recent highs.
• There is hope that protests related to covid restrictions will enable an earlier exit from lockdown conditions, but this remains to be seen. It’s also unclear a rapid re-opening would drive a sharp rebound in economic activity, at least initially, as a more rapid spread of Covid may present meaningful headwinds.