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USD/CNH last sits at CNH7.0003, ~140.....>

CHINA YUAN
CHINA YUAN: USD/CNH last sits at CNH7.0003, ~140 pips higher. It tries to
consolidate above the CNH7.0000 figure, as participants are having second
thoughts about progress in U.S.-China trade negotiations. Friday already saw the
earlier enthusiasm fade, with a leg higher in USD/CNH noted as U.S. Pres Trump
downplayed reports stating that the White House agreed to a roll-back of some
tariffs on China. On Saturday, Pres Trump reiterated his pushback against
reports re: tariff unwind & added that Beijing wants the deal more than he does.
- The PBoC set its central USD/CNY mid-point at CNY6.9933, a touch stronger than
on Friday but in line with estimates.
- Over the weekend, we saw Chinese inflation data. CPI accelerated to +3.8% Y/Y
from 3.0% vs. exp. of +3.4%. PPI printed at -1.6% Y/Y vs. the prior -1.2% and
forecast of -1.5%.
- The CNH7.0041 reaction high printed after Friday's comments from Trump has
continued to cap gains today. Above there opens the 100-DMA at CNH7.0324. Bears
look for a dip under the Nov 7 trough at CNH6.9527.
- Chinese monthly activity indicators, due on Thursday, will be of note.

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