USD/CNH Pulls Lower, But Calls Continue For Policy Support Post Mixed Oct Credit Data

From highs just above 7.3100, USD/CNH pulled back to 7.2900 by NY trade on Monday. We last tracked bear 7.2925, with CNH gaining 0.19% for Monday's session, in line with broader USD index losses. USD/CNY spot finished up near 7.2890, while the CNY NEER (J.P. Morgan index) edged down slightly to 123.31 (-0.06%).

• Late yesterday, October aggregate credit figures crossed, which came in slightly below expectations, 1850bn yuan (versus 1950bn yuan expected and 4122.7bn yuan prior). New loans were 738.4bn yuan, versus 655bn yuan forecast (prior 2311.8bn yuan).
• The detail showed slowing corporate and housing related credit/loan activity, while government bond sales spiked. Weak private sector credit demand has reinforced sell-side views that further monetary policy support is likely.
• A reminder tomorrow we get October activity figures and the 1yr MLF outcome (no change expected from the current 2.5%).
• CNH saw some benefit from a slight tick lower in US yields, although US-CH government bond yield spreads are only a touch below recent highs.
• In the equity space, the Golden Dragon index rose 0.83% in Monday US trade.