USD/CNH Coiling Around 7.30 Into Weekend, Eyes On Next Week’s Biden-Xi Summit

USD/CNH continues to oscillate either side of CNH7.30 as we move towards the weekend.

• As we noted elsewhere, confirmation of next Wednesday’s Biden-Xi summit did little for the yuan, with an uptick in the wider USD, stemming from yield differentials/Fedspeak and net selling of mainland China equities via the HK-China Stock Connect schemes supporting the rate over the last 24 hours or so.
• Well-documented Chinese property sector worry continues to do the rounds, with the latest comments from the PBoC Governor on the matter doing little to placate worry.
• Elsewhere, a PBoC advisor tried to assure re: the country meeting it’s ’23 GDP growth target, while pointing to the potential for a wider fiscal deficit to be deployed to support economic growth in ’24.
• Note that worry re: credit strains remain evident, with reports flagging that this week has seen the largest round of onshore bank NCD issuance on record.
• CNH TN points nudged higher today, but remain in negative territory, comfortably shy of recent highs.
• The PBoC continues to lean against runaway yuan weakness via the daily midpoint fixing, although the difference in the fix vs. the sell-side BBG survey estimate has moved off cycle extremes.
• Well-defined technical parameters remain in play for USD/CNH, after the recovery from multi-week lows registered on Wednesday.
• Monthly economic activity and money supply/credit data headline the Chinese economic data docket in the coming days.