Offshore Yuan Weaker After 5 Day Rally

Offshore yuan is weaker but well within yesterday's range, CNH has risen for the past five session. USD/CNH up 24 pips at 6.4604, off intraday highs of 6.4633. Yesterday the pair moved in a range from 6.4536 to 6.4692, 1-month implied volatility continues its slide, last down 0.02 at 3.765%, just shy of 2021 lows at 3.5875% hit in May.

• Goldman Sachs earlier cut its China 2021 GDP forecast to 7.8% from 8.2%.
• In geopolitics China released two captive US citizens who had been held since 2018 which could help thaw relations with China. There were also reports that a UK warship sailed through the Taiwan Strait yesterday for the first time since 2018. It follows comments from the defence ministry that the Chinese air force has made more than 500 incursions into Taiwan's air-defense identification zone so far in 2021.
• Evergrande worries continue to linger, the PBOC spoke late on Monday sand said that it would ensure a healthy property market and protect home buyers' rights.