USD/CNH Back Sub 7.2900, But Lags Most Majors (Except JPY), CNH Liquidity Tight

USD/CNH probed above 7.2900 in offshore Tuesday trade (aided by the US retail sales beat), but tracks slightly lower in early Wednesday dealings, last near 7.2885. CNH lost 0.20% for Tuesday's session, generally underperforming the G10 (although yen dropped by a similar amount). USD/CNY spot finished up at 7.2685, while the CFETS yuan basket tracker held near recent lows (per BBG).

• Onshore USD demand was reportedly lower yesterday compared to Monday (per BBG), although state banks were still in the market to maintain a reasonable supply/demand balance.
• CNH liquidity remained tight, the 1 week implied CNH yield holding above 4%, the 1 month near 3.34% currently, which is still close to multi month highs. For USD/CNH we remain above all key EMAs (the nearest is the 20-day, close to 7.2840). Early July highs above 7.3100 remain intact.
• The local data calendar remains empty today. Focus will remain on any details from the Third Plenum, while in the US the Republican National Convention continues, with rhetoric around China and tariffs continuing to cross the news wires.
• In the cross asset space, local equity sentiment has stabilized somewhat, the CSI 300 rebounding from recent lows just under 3400. For CGB yields, 2yr is back close to recent lows at 1.62%, the 10yr firmed a touch to 2.26% yesterday.