Outperforms Broader USD Gains Amid Higher Funding Costs, Q1 GDP/Mar Activity On Tap Today

USD/CNH held relatively steady post the Asia close on Monday. The pair couldn't get sub 7.2550 in a meaningful way, but moves above 7.2600 drew selling interest. We track near 7.2590 in early Tuesday trade, after a modest 0.11% CNH gain for Monday's session. This is still outperforming broader USD gains elsewhere, with the BBDXY and DXY up nearly 0.20%. USD/CNY spot finished up at 7.2381.

• Tighter CNH liquidity is being cited as a support point. CNH overnight Hibor rates continue to climb, while 1 week CNH implied yields sit above 5%, in the upper of its range for the past 6 months. The 1 month is back to +4.76%, close to fresh highs going back to Sep last year.
• The better equity tone (CSI 300 up +2.11% yesterday) was another differentiator for CNH, after the regulator stated closer supervision of the market. The Golden Dragon index was weaker in Monday US trade though, off 0.48%.
• Today we have a run of data outcomes, with Mar homes out, followed shortly after by Q1 GDP. The market expected +1.5% q/q growth (+1.0% was prior), while y/y is expected at 4.8% (prior 5.2%). Also out is the run of Mar activity prints, with IP, retail sales and fixed asset investment all due.
• With some sell-side analysts revising higher their 2024 growth projections today's data will be in focus to gauge end Q1 momentum, along with property market/house price developments.