USD/CNH Capped Above 6.9450, Equity Backdrop Improves

In NY trade we got above 6.9450, around recent highs, as the USD saw broad strength as front end yields rebounded. This wasn't sustained though, with the pair moving back near 6.9300 by the close, which left CNH 0.16% firmer for Thursday's session. The CNY NEER rose for the first time in a week, back to 124.65 (J.P. Morgan index), +0.13%.

• The local data calendar is empty today, but note we do get Apr official PMI prints on Sunday.
• Focus remains on the broader economic backdrop, with headlines crossing yesterday around the challenging youth job market. The China State council unveiled a plan earlier in the week to boost youth employment. There has also been reports of weaker housing sales momentum through April, while yesterday's profits data remained fairly downbeat
• The market will be hoping for clearer policy direction from the April Politburo meeting (in terms of efforts to aid the recovery), although major details are typically not released from such meetings.
• In the equity space, the China Dragon Index rose a further 1.70% amid broad tech gains in US trading. To recap, the CSI 300 Index rose 0.74% yesterday, putting the index back to 3988.4, note the simple 200-day MA is not too far away at 4006.46.