USD/CNH Remains Above CNH7.30

USD/CNH holds above CNH7.30, generally tracking the mild USD swings seen since Asia-Pac trade got underway.

• The lack of vol. in the cross during the mainland holiday period (thus far) will have pleased policymakers.
• A move higher in the Hang Seng provided some background support for CNH, although USD/CNH’s range remains contained and participation is seemingly light, with mainland markets set to return from the Golden Week holiday next week.
• Yesterday’s sell-side GDP growth forecast upgrades (both Citi & JPM now look for 5% Chinese GDP growth in ’23) and growing hope re: a meeting between Presidents Biden & Xi, will have added further background support to CNH.
• China’s CCTV published 7-day holiday domestic tourism revenue growth of +132.6% Y/Y, with domestic trips over the holiday period +78.9%. A quick reminder that China was under ZCS at this time last year, so the strong Y/Y growth in those metrics isn’t a shock. We await the longer run comparables (i.e. vs. pre-COVID times) for more meaningful measurements/comparison.
• USD/CNH remains in a contained range, with well-defined technical parameters in place.
• Outside of the return of mainland markets and digestion of holiday-related economic performance, next week will see the bulk of the meaningful monthly Chinese economic data cross.