USD/CNH Eyes 7.3200 Test Amid Renewed Property Market Concerns

USD/CNH got to highs around 7.3180 in NY trade on Monday, with dips sub 7.3100 supported post the Asia close. CNH weakened 0.23% for Monday's session, modestly outperforming gains in USD indices (BBDXY +037%). USD/CNY finished up at 7.3120, while the CNY NEER (J.P. Morgan index) rose 0.27% to 123.04, fresh highs in the index back to June of this year.

• The local data calendar remains empty today, with focus likely to rest on property developer sentiment. Evergrande was the main focus point yesterday, as it failed to repay onshore bond, putting its credit restructuring into doubt.
• A Bloomberg gauge of China property developers fell 7.10% in Monday trade (the most since Dec last year). The CSI 300 real estate sub index fell nearly 2.5% and in index terms is approaching July lows. The headline CSI 300 lost 0.65%, while Northbound stock connect flows returned to net selling.
• Focus is turning to the upcoming Golden week holiday period, and whether we see a sales rebound in the property sector. The holiday period kicks off this Friday (Sep 29) and runs through to October 7.
• For USD/CNH we haven't spent much above 7.3200 in recent weeks, while dips into the 7.2900/7.3000 region were supported last week.