USD/CNH Tests Above 7.2500 Before Retracing, July Inflation Figures On Tap

Spot USD/CNH got above 7.2500 post the Asia close (highs just above 7.2510), before selling interest capped the move. Dips back towards 7.2300 were supported in NY trade, while we finished up at 7.2370, a loss of 0.50% for CNH in Tuesday's session. USD/CNY closed under 7.2200, while the NEER edged a little higher to 121.75.

• The data focus today rests on the July inflation figures. The market expects headline CPI at -0.4%y/y, versus flat in June. PPI deflation is expected to ease to -4.0%y/y, from -5.4% in June.
• This data comes after yesterday's July trade figures, which were weaker than expected, particularly in terms of import growth. This places fresh clouds over the growth outlook. Note we should also get July aggregate credit figures at some stage (release window is the 9th to 15th of August).
• In the equity space, the Golden Dragon index lost 2.37% in US trade, the third straight loss for the index. To recap, onshore equities finished modestly lower yesterday (-0.26% for the CSI 300).
• Headlines crossed earlier around US plans for investment restrictions into China, see this link for more details. The rules will still reportedly take a year to enact.