USD/CNH Eyeing Break Back Below 6.7800

The USD/CNH bias was mostly skewed to the downside post the Asia close, with selling interest evident on moves above 6.8000. We currently track closer to 6.7800, a level we haven't been able to sustain moves below so far this week. The CNY NEER edged higher, albeit by a more modest 0.09% to 126.32 (J.P. Morgan Index).

• Late yesterday, Jan FX reserves rose to $3184.4bn, which was above the market forecast of $3155.bn ($3127.6bn prior). This is in line with the trend of firmer reserves prints throughout the region for Jan, as lower USD levels boosted valuations.
• The data calendar is quiet today, although from tomorrow until the 15th we are scheduled to get aggregate finance data for Jan. The market looks for a bumper 5400bn yuan in aggregate finance.
• In the equity space, the China Dragon index rose 2.35% in US trade, the first gain in 3 sessions. This follows modest gains for onshore equities yesterday, while northbound stock connect outflows nudged up to -3.86bn yuan (from -0.54bn yuan the previous day).
• Elsewhere China officials reportedly declined a call from the US Defense Secretary after the downing of the alleged spy balloon. China related comments will also be eyed in US President Biden's State of the Union address today.