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MNI Credit Weekly: Le Vendredi Noir
USD/CNH Holds Monday Rebound, Wedged Between 100 & 200-day EMAs
USD/CNH found selling interest above 7.2200 on Monday's session, while dips post the Asia close to 7.2000 were supported. We track near 7.2140 in early Tuesday dealing, having lost 0.30% in Monday trade. USD/CNY finished up near 7.2100, well off recent highs above 7.2400. A gain in CNY terms of 0.45%.
- USD/CNY's slump reflected catch up to USD weakness as onshore markets returned for the first time yesterday since last Tuesday. BBG noted that USD dip buying was quite strong though, with state owned banks reportedly selling USDs at various stages of yesterday's session to balance the market.
- USD/CNH is comfortably above post US NFP lows from Friday (7.1653), the pair wedged between the 200-day EMA (7.1990) and the 100-day EMA (7.2244).
- The local data calendar just has April FX reserves on tap, which will likely print towards the end of the local session. On Thursday April trade figures are due.
- In US trade the Golden Dragon index was down slightly. This followed a positive tone from onshore equities as markets returned (the CSI 300 up 1.48%).
- Also note Shenzhen has eased house buying restrictions (see this BBG link for more details).
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.