USD/CNH Back Sub 7.1900, Equity Trends To Remain In Focus

USD/CNH generally found selling interest above or near the 7.1950 region through Monday's session. The pair tracks near 7.1870 in early Tuesday dealing, little changed in aggregate for Monday's session. USD/CNY finished just above 7.1800, while the CNY NEER (J.P. Morgan Index) was a touch higher (0.05%) at 124.18.

• Note the simple 200-day MA comes in near Monday highs (close to 7.1960). The 100-day EMA sits slightly higher near 7.1990.
• The yuan saw modest benefit from the lower US yield backdrop, but USD/CNH remains within recent ranges. The correlation of USD/CNH and US-CH yield differentials doesn't appear that strong of late.
• Bloomberg also noted state banks were leaning against yuan depreciation pressures yesterday, as fallout from the wind up order for Evergrande weighed on broader sentiment.
• To recap, the CSI 300 closed down 0.90% for Monday trade, the Shanghai Composite off by a similar amount. In US Monday trade, the Golden Dragon index lost a little over 1%.
• We are likely to see equity trends remain in focus today, given recent efforts to support sentiment. Local wires noted yesterday that China will guide listed SOEs to focus on market performance/valuation, with an eye on better rewards for investors.
• The data calendar is empty today, with January PMIs on tap tomorrow.