USD/CNH added a handful of pips amid.....>

CHINA YUAN: USD/CNH added a handful of pips amid reports that a U.S. warship

sailed through the Taiwan Strait, but has pared gains since. It last trades

virtually unchanged at CNH6.8769, remains range-bound.

- This comes ahead of the release of China's Q4 GDP and a slew of monthly

activity indicators for Dec. Chinese state media and VP Liu He have already

flagged that 2019 GDP growth will print above +6.0% Y/Y. The central

government's target for 2019 was an expansion of between +6.0% to +6.5% Y/Y.

- Chinese money & credit data topped expectations almost across the board

(ex-new CNY loans), both nominally and adjusting for the new methodology.

- The rate shed ~160 pips yesterday drawing support from the broader risk-on

feel, initially linked to upbeat comments re: Sino-U.S. phase-two talks.

- Bears look for a dive through the Jan 14 low of CNH6.8663, locked in a key

support zone where the rate built a base through July. A break would open

CNH6.8168, the low of Jul 1. On the flip side, a jump onto the CNH6.9000 handle

would allow bulls to target the CNH6.9763 200-DMA.

- As a reminder, the PBoC will announce their monthly LPR fixing on Monday.