USD/CNH has shed ~55 pips, last trades...>

CHINA YUAN: USD/CNH has shed ~55 pips, last trades at CNH6.8866 after the

signing of Sino-U.S. phase-one deal. The yuan may have drawn a degree of support

from earlier comments made by U.S. Vice President Pence, who suggested that

phase-two talks are already underway. That being said, concerns linger over

those remaining divisions, which were left unresolved by the phase-one accord.

- China's new home prices rose 0.35% M/M in Dec, slightly faster than in Nov.

- Bears continue to focus on the support zone in the CNH6.8700 area (highlighted

in the recent bullets), stretching to the Jan 14/Jul 11 lows of CNH6.8663/13.

Bears look for a break here to gain a fresh impetus & target CNH6.8168, the low

of Jul 1. Bulls look for any signs suggesting that the rate is building a base.

They would be pleased to see a rebound above the 200-DMA at CNH6.9755.

- As expected, phase-one pact involved clauses against competitive devaluations

(albeit some analysts suggest there is little new of substance there). The PBoC

commented that the FX agreement will be conducive to market stability.

- The focus turns to China's Q4 GDP & a slew of monthly activity indicators for

December. Both are due for release tomorrow, at 02:00 GMT.