The dovish shift by the US Fed set the tone...>

CHINA: The dovish shift by the US Fed set the tone for Chinese markets today

allowing USDCNY to break temporarily below the 6.7000 level which had previously

been touted as a level that the PBOC could look to defend. USDCNH has remained

clear of 6.7000 but has consolidated below  6.7200 following yesterday's drop. 

- Chinese yields have followed the US lower, with the 10 year dropping 2.7bps to

close in on cycle lows at 3.081%. 

- On the data front a slight beat in PMI readings has been offset by a flood of

profit warnings by Chinese corporates, which seems to have prevented stocks from

heading higher. The CSI300 briefly took out the 3200 level but currently sits

just below it. In contrast the HSI has added another 1%, breaking cleanly above

its 200dma.

- All eyes are on the resumption of US-China trade talks with skepticism

remaining widespread despite recent risk on flows.