USD/CNH Sub 7.3000, But Weaker Equities, Lower Yields Headwinds For The Yuan

USD/CNH recorded a 0.13% dip for Thursday's session, around half the loss seen in terms of the USD indices (both BBDXY and DXY off 0.26%). The pair got to intra session lows from Wednesday, just under 7.2920 in Thursday trade, but we sit slightly higher in latest dealings (near 7.2940).

• USD/CNY onshore spot finished up at 7.2682, although the input into today's fixing (the 4:30pm onshore close) was higher near 7.2700.
• For USD/CNH, the 20-day EMA is not too far away at 7.2866, further south is the 50-day near 7.2680.
• Focus again is likely to rest on the CNY fixing, with market estimates potentially lower than yesterday's outcome given the downshift in USD indices and the downtick on the official 4:30pm close onshore.
• A steady outcome or only minor drop will reinforce recent trends around a steady depreciation in the yuan.
• The data calendar is quiet today. In the cross asset space, we continue to see local equity underperformance. The CSI 300 off a further 0.51% in Thursday trade. Local yields have retraced lower, the 2yr back in the 1.60/1.65% region, the 10yr steadier though, last around 2.25%, still holding a good chunk of the earlier bounce this week post PBoC headlines around bond borrowing from banks.