Onshore & Offshore Spot Near Recent Cyclical Lows, Caixin Manufacturing PMI Due Today

USD/CNH got close to 7.3400 overnight, last tracking around the 7.3370 level. The Oct 26th high comes in just above 7.3400, while beyond that is the recent record high 7.3750. The China currency mostly followed USD trends, but the CNY NEER is still 0.40% lower for the start of the week, per the J.P. Morgan index. Today the focus will rest on the Caixin manufacturing PMI. The market expects a 48.5 print, versus 48.1 last month.

• Recall yesterday the official manufacturing prints were much weaker than expected, particularly on the services side. The Caixin PMI tends to focus more on the SME side of the economy.
• The other focus point will be the USD/CNY fixing. Note the 4:30pm level onshore yesterday came in at 7.2985, while the stronger USD overnight will also bias fixing estimates higher.
• The higher actual fixing levels (yesterday 7.1768, from 7.1698 on Friday) has generally encouraged positive USD sentiment in recent sessions, although the market may be mindful of fresh intervention type flows, given we are back close to recent highs for both onshore and offshore spot.