Tracking Recent Ranges, Onshore Equities Threatening Downside 100-Day MA Breach

(MNI Australia) USD/CNH was range bound post the Asia close on Thursday. Offers were evident on moves towards the 6.9100 level, while on the downside we couldn't test sub 6.8900. The currency was little changed for the session, while the NEER edged slightly lower, down -0.19% to 126.15 (J.P. Morgan Index).

• Directional correlation for USD/CNH is still evident with US-CH 2yr government bond yield spreads, albeit with CNH not displaying the same beta with respect to sharp moves in the spread (which is all being driven by the US leg).
• This, along with broader USD sentiment, is likely to dictate CNH sentiment as we head into the weekend.
• The authorities have reportedly told some brokers they can resume contribution to pricing feeds. This follows the abrupt halt earlier in the week.
• In the equity space, the Golden Dragon Index rose just over 2.5% in Thursday trade, putting the index just shy of its 200-day MA. Onshore shares finished weaker yesterday, the CSI 300 down 1.2%. This index is back close to the simple 100-day MA, a support point we haven't been under since the start of the year.
• The ratio of China to global equities is not showing a strong uptrend at this stage. The other focus point is the regulators pausing approvals on global depository receipts sales.