The large miss in the Caixin PMI which hit....>

CHINA: The large miss in the Caixin PMI which hit 48.2 in Jan vs 49.6 in Dec has

seen Chinese assets come under pressure. The PMI reading seems to have

overridden Xinhua headlines that noted important progress regarding US-China

trade talks, including an agreement to promote trade balance trade, as well as

the noteworthy pickup in external demand seen in the PMI sub indices. 

- USDCNH is up ~0.5% on the day as the 200dma comes back into play as resistance

at 6.7554.

- After opening ~1% higher Chinese stocks have given back the bulk of gains with

the CSI300 testing the 3200 level and the HSI looking to hold above its 200dma. 

- Fixed income markets have had a muted session despite the weak domestic

outlook in the PMI report raising the need for further easing. The renewed yuan

weakness may be counteracting this impact as fears over renewed USDCNH upside

tempers bets on further PBOC action.