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USD/CNH Maintains Recent Ranges, Yesterday's Early Equity Bounce Not Sustained


MNI (Australia) Post the Asia close on Monday, USD/CNH gravitated higher, getting into the 7.3050/60 region before coming back lower into the NY close. We last tracked near 7.2920, with CNH little changed versus Friday closing levels in NY from last week. Lows yesterday were just under 7.2700, keeping us within ranges for the pair. USD/CNY finished at 7.2889, while the CNY NEER (J.P. Morgan index) edged lower to 121.85.

  • The CSI 300 finished yesterday at +1.17%, well off intra gains of +5%. In index terms we are back close to 3750, which is around +1.5% above earlier August lows. The Golden Dragon index rose 2.25% in US trade on Monday.
  • Headlines also crossed from Bloomberg late yesterday that the authorities asked some funds to avoid net equity sales.
  • To recap, northbound stock connect outflows were -8.25bn yuan yesterday. In the last 16 trading days, only 1 has seen net inflows. The market may be looking for a firmer macro backdrop before turning constructive on the local equity outlook. This Thursday we get official PMI prints for August.
  • There was better news in terms of relations with the US, with US Commerce Secretary Gina Raimondo announcing with her Chinese counterpart Wang Wentao, the establishment of a “commercial issues working group” to meet twice-annually to “seek solutions on trade and investment issues and to advance U.S. commercial interests in China." (see this link for more details).

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