USD/CNH Respects Recent Ranges, CNY NEER To YTD Lows

CNH lagged the weaker USD trend through Friday. Prior to the payrolls print we were in a 6.9100/6.9200 range, before spiking to ~6.9340 post the outcome. We got back to 6.9150 late in NY trade before edging back up to 6.9200, this is where we currently track in the first part of dealing today. The CNY NEER edged down to 124.41 (-0.11%, J.P. Morgan Index), we were around 125.00 at the end of the prior week. The latest reading is a fresh YTD low.

• Some carry over from Friday's weaker services PMI/local equity market underperformance may have been a headwind for CNH. Still, the Golden Dragon Index rose just over 1% in US trade on Friday.
• Yesterday also saw Apr FX reserves released, which printed stronger than expected at $3204.8bn ($3193.80bn was forecast). So even the drift higher in USD/CNH in Apr didn't weigh on aggregate reserves (broader USD indices were mostly softer though, which may have aided valuations).
• The local data calendar is quiet today, but tomorrow we get Apri trade data. Then later in the week is Apr inflation data (on Thurs). Also note that from tomorrow onwards (release window 9-15th of May) we are due to get Apr aggregate credit figures.