USD/CNH Breaks Below CNH6.8, Awaits Chinese Activity Data

Spot USD/CNH took a dip, breaching the CNH6.8000 figure for the first time since May 2019. The PBoC fix provided no obstacle to the yuan appreciation, as it virtually fell in line with BBG estimate. Meanwhile, China's central bank conducted CNY600bn of 1-Year MLF, which amounted to a sizeable net injection.

• The main focus falls on China's monthly economic activity indicators, due at the top of the hour.
• Spot USD/CNH sits -210 pips at CNH6.7874 when this is being typed, after punching through yesterday's trough, the CNH6.8000 mark and the 76.4% retracement of the Mar 21, 2019 - May 27, 2020 rally at CNH6.7946. Bears set their sights on the round figure/May 3, 2019 high of CNH6.7500/11, followed by the lower 3.0% Bollinger band at CNH6.7466. Bulls need to retake Sep 9 high of CNH6.8610 to get some reprieve.
• Chinese President Xi held a video conference with EU leaders (Merkel, von der Leyen, Michel) to discuss a bilateral investment deal. Brussels said that China must continue to open its markets to if the agreement is to be reached by year-end, as planned.
• The Global Times reported that a Covid-19 vaccine could be distributed among China's general public as soon as in November or early December after a successful Phase 3 trial.