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USD/CNH Close To YTD Highs, May Inflation Figures Out Today

CNH

Tuesday highs in USD/CNH came just shy of 7.2750, which printed during US trade. In early Wednesday dealings we sit slightly lower, around 7.2720 (CNH recorded a modest 0.08% loss for Tuesday's session). USD/CNY spot finished up at 7.2544 yesterday, so just shy of the upper daily trading limit (7.2558, +2% above the daily fixing outcome).

  • The general trajectory for USD/CNH remains skewed higher, albeit with a modest appreciation path. YTD highs are just above 7.2800, a potential upside focus point, ahead of key US data /event risks later. On the downside, the 20-day EMA is back near 7.2555, the 50-day around 7.2460.
  • BBG notes that state owned banks were USD sellers yesterday as USD/CNY rose to 7.2530 in onshore trade (which was a fresh high for 2024). The modest upside drift in the USD/CNY fixing is allowing some yuan depreciations pressures.
  • Today we have the May inflation prints on tap. The market expects 0.4% y/y for CPI (prior 0.3%), while the PPI is projected at -1.5% y/y (from -2.5% prior). Note we also wait for May new loans/aggregate finance data.
  • Local equity sentiment was negative yesterday, the CSI 300 closing near the simple 200-day MA (off 0.87%). In US trade the Golden Dragon index fell 1.59%.
  • Government bond yields see the 10yr wedged close to 2.30%, the 2yr around 1.74%, fresh lows back to 2020.
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Tuesday highs in USD/CNH came just shy of 7.2750, which printed during US trade. In early Wednesday dealings we sit slightly lower, around 7.2720 (CNH recorded a modest 0.08% loss for Tuesday's session). USD/CNY spot finished up at 7.2544 yesterday, so just shy of the upper daily trading limit (7.2558, +2% above the daily fixing outcome).

  • The general trajectory for USD/CNH remains skewed higher, albeit with a modest appreciation path. YTD highs are just above 7.2800, a potential upside focus point, ahead of key US data /event risks later. On the downside, the 20-day EMA is back near 7.2555, the 50-day around 7.2460.
  • BBG notes that state owned banks were USD sellers yesterday as USD/CNY rose to 7.2530 in onshore trade (which was a fresh high for 2024). The modest upside drift in the USD/CNY fixing is allowing some yuan depreciations pressures.
  • Today we have the May inflation prints on tap. The market expects 0.4% y/y for CPI (prior 0.3%), while the PPI is projected at -1.5% y/y (from -2.5% prior). Note we also wait for May new loans/aggregate finance data.
  • Local equity sentiment was negative yesterday, the CSI 300 closing near the simple 200-day MA (off 0.87%). In US trade the Golden Dragon index fell 1.59%.
  • Government bond yields see the 10yr wedged close to 2.30%, the 2yr around 1.74%, fresh lows back to 2020.