Outperforms, Eyes On USD/CNY Fixing Outcome

The China currency was a notable outperformer through Monday's session. USD/CNH briefly fell below 6.7800 late in Asia trade yesterday before recovering back above 6.8100 late in NY. We sit slightly lower now, near 6.8020/30. Highs from early yesterday, around 6.8325, remain intact. The CNY NEER was up +0.46% to 126.21 for Monday (J.P. Morgan Index).

• The stronger than expected CNY fixing yesterday, -71pips below the market consensus in USD/CNY terms, certainly helped stabilize sentiment. The market focus is likely to rest on whether this is the resumption of a more stronger bias from a fixing standpoint.
• Equities generally remained on the backfoot, with the China Dragon Index falling by 1.83% in US trade, the 3rd straight session of falls. This comes after yesterday's onshore equity market weakness, although Northbound stock connect outflows ended being very modest at around -0.54bn yuan.
• The US has said that it will reach out to China authorities, when the time is appropriate, to reschedule Blinken's trip.
• On the data front, foreign reserves for Jan print. The market expects a $3155.0bn outcome, versus $3127.6bn prior. There is no scheduled time for the release.