USD/CNH Steady Despite Potentially Fresh Stimulus Measures

USD/CNH found selling resistance on moves above 7.3000 post the Asia close on Tuesday. However, we didn't revisit earlier lows around 7.2700. The pair tracks near 7.2870 in early Wednesday dealings, after posting a modest 0.07% gain for Tuesday's session. USD/CNY finished up at 7.2940 on Tuesday. The CNY NEER lost ground, dipping -0.22% to 123.65.

• The late Asia Pac focus on Tuesday was a BBG sources report on the prospect of new stimulus and a wider fiscal deficit. This produced a modest blip lower in USD/CNH but little follow through, see this link for more details.
• The limited market reaction may have reflected the modest overall size of the proposed stimulus and also its focus on infrastructure. The IMF advised that China needs to do more to reinvigorate the real estate sector (see this BBG link for more details). The IMF nudged down its China GDP forecasts for this year and next.
• In the equity space, onshore sentiment ended yesterday weaker, the CSI 300 down -0.75%, the index at 3657 (fresh lows back to Nov last year). However, the Golden Dragon index surged 3.14% in US Tuesday trade, with the outlined stimulus reports above helping.
• On the data front we still await September aggregate credit/new loans figures. On Friday September CPI/trade figures are out.