USD/CNH Slides Despite Above-Forecast PBOC Fix

Spot USD/CNH has been losing altitude in Asia-Pac hours and has just breached Wednesday's low, even as the PBOC set its central USD/CNY mid-point at CNY6.4715, 8 pips above sell side estimates. The rate last trades -80 pips at CNH6.4679.

• Chinese Premier Li urged German Cll'r Merkel to respect China's core interests amid disagreements on Hong Kong and human rights issues, when the two spoke virtually on Wednesday. They reportedly discussed cooperation on vaccine matters, while the German side noted that Beijing signalled its support in talks about the digital tax.
• The Global Times cited Chinese demographers who disagreed with a recent FT report, which suggested that China's 2020 census will see the first population decline in five decades. The demographers said that the population is likely to start shrinking from 2022, which may inspire policy initiatives to revive population growth.
• On the data front, Friday's official PMIs & Caixin M'fing PMI take focus during the remainder of this week. China will then observe Labour Day holidays through May 5, with analysts expecting a surge in domestic travel activity during that period. Trip.com Group estimated that bookings for plane seats, hotel rooms and car rentals eclipsed those seen over the same holiday period in 2019.
• A break under Mar 3 low of CNH6.4580, followed by Feb 24 low of CNH6.4412. On the flip side, a rebound above the 100-DMA/Apr 22 high at CNH6.4955/95 would support the bullish case.