USD/CNH Just Shy Of 7.00, Some Forecasters Downgrade 2023 GDP Outlook

USD/CNH spot most of the post Asia close on the front foot, after yesterday's weaker than expected April activity outcomes. We got to fresh YTD highs just shy of the 7.00 handle, but didn't breach this level. The pair last tracked in the 6.9980/90 region. CNH lost 0.57% for Tuesday's session, underperforming broader USD indices. The CNY NEER (J.P. Morgan Index) eased back to 124.32, -0.16% for the session.

• A breach of the 7.00 handle may draw some intra-day volatility, but is unlikely to be a large event for markets, given we spent a good part of Q4 last year above this level.
• The local data calendar has April new home prices on tap. The prior outcome was 0.44%, there is no consensus expectation. FDI figures for April may also print in the next few days.
• J.P. Morgan and Barclays shaved their respective 2023 GDP growth forecasts post yesterday's data outcomes (back to 5.9% from 6.4% for J.P. Morgan and to 5.3% from 5.6% for Barclays). Other forecasters left the 2023 outlook unchanged though.
• The Golden Dragon index fell 0.50% in US Tuesday trade, giving back a touch of Monday's +4% bounce. To recap, onshore equities finished down 0.52% for the CSI 300 yesterday, while Northbound stock connect flows were negative (-3.4bn yuan). 10yr bond yields edged lower, last near 2.71%, but remain above recent lows.