USD/CNH Can't Sustain Sub 20-day EMA Levels, EU Raise Tariffs On China EVs

USD/CNH tracks near 7.2620 in early Thursday dealings. The pair saw a near 200pip drop post the US CPI miss, hitting lows around 7.2500, before rebounding somewhat as the FOMC unfolded. For Wednesday's session the CNH posted a modest 0.12% gain, the first in 6 sessions, but lagging most G10 FX gains, particularly higher beta currencies. USD/CNY spot ended Wednesday's session back near 7.2400.

• Post US CPI lows in USD/CNH came under the 20-day EMA (near 7.2565), but couldn't pierce the 50-day EMA (7.2467) support point. Recent highs rest near 7.2750.
• The China data calendar is empty today, although we still wait for May new loans/aggregate credit data. The PBoC noted yesterday it will "beef up monitoring of broad credit growth to promote steady expansion" (per Bloomberg), and broaden macro-prudential policies.
• Next Monday we get the 1yr MLF outcome, with no change expected (currently at 2.50%). Government bond yields remained close to recent lows post yesterday's inflation data for May (the 10yr remains wedged near 2.30%). The CPI print suggested a benign domestic demand backdrop, while PPI deflation was pared though.
• In the equity space, both the CSI 300 and Shanghai Composite managed modest gains. In Wednesday US trade, the Golden Dragon index underperformed broader global trends.
• Late yesterday the EU also announced additional tariffs on China EV imports, starting next month (see this Bloomberg link).