USD/CNH picked up a bid after the........>

CHINA YUAN: USD/CNH picked up a bid after the re-opening of onshore USD/CNY

trade, showing above Mar 19 high of CNH7.1653, the strongest level since Oct

2019. Hard to single out a particular headline catalyst behind this move, but

worth reiterating that there is an ongoing worry surrounding the Hong Kong

situation, with the city-state's Legco conducting the second reading of the

Security Law today. In NY/Asia crossover, BBG circulated a source report noting

that the U.S. mulls punitive sanctions against China over its moves vs. HK.

- The PBoC continued to fix its central USD/CNY mid-point lower (and below exp.)

today, but the yuan has softened nonetheless.

- Local industrial profits fell just 4.3% Y/Y, after a 34.9% decline seen the

prior month. The NBS commented that April's improvement occurred on the back of

faster production & sales, better investment returns & a weak base effect.

- USD/CNH sits +214 pips at CNH7.1660, with bulls eyeing the high of 10 Oct 2019

at CNH7.1684, followed by the 2019 peak at CNH7.1965. Bears look for a retreat

through May 26 low of CNH7.1356, towards the 50-DMA at CNH7.1034.

- Looking ahead, China will release its official PMI data on Sunday.