On The Defensive On Lack Of Meaningful Support From State Council

USD/CNH moves further away from session lows and settles around CNH7.1300 after the Chinese State Council (at the end of a meeting that was touted in recent days) noted that the county must take more forceful measures re: responding to changes in the economic situation, stressing the need for continued improvement in the economy.

• The post-meeting comments didn’t reveal anything in the way of broad-based stimulus moves (some had expected such steps, but July’s Politburo gathering is a more likely event to provide such an update, if it is indeed forthcoming), with the State Council tipping its hat towards prioritising support for tech start-ups and venture capital funds, with measures set to be rolled out in a timely manner.
• The Council also noted that the country’s overall economic situation is recovering.
• Nothing changed for USD/CNH with regards to the meaningful technical lines in the sand, outlined earlier, with the Chinese economy set to undergo a bumpy few months when it comes to economic data (at a minimum), even as China-related worries moderate from their recent peak on the back of stimulus speculation.