Officials Jawbone Yuan Lower

The yuan looking soft in early trade on Monday, buffeted by several commentary pieces over the weekend. USD/CNH is 114 pips higher at 6.3717 after briefly dropping below 6.36 on Friday. Sheng Songcheng, former director of the PBOC's statistics and analysis department, told Xinhua that the yuan is overbought, and expressed his opinion that the rally won't last. He added that China should prevent short term inflows to prevent further yuan strength.

• A separate piece in Financial News, the PBOC backed publication, did warn of risks to the yuan from US policy and control of the pandemic.
• Yet another piece over the weekend in CSJ highlighted that strength in the yuan will not necessarily translate into gains for China's A-Shares. A former SAFE official said that exporters will come under pressure from a stronger currency which creates an uncertain relationship between yuan/stocks, adding that appreciation won't offset higher commodity prices.
• All three pieces come as Chinese officials at the highest levels have warned about rising commodity prices and outlined policies to reign in price pressures. On Friday the PBOC set a weaker than expected yuan fix, setting the rate 21 pips above sell-side estimates, the latest in a series of weaker than expected fixes after consistent stronger/in-line fixes since LNY.
• Markets await PMI data at the top of the hour.