USD/CNH Threatening 6.7600 Test

USD/CNH tracked lower post the Asia close. In the NY session we got close to 6.7600 before support emerged. The pair was last around 6.7650, leaving CNH 0.25% stronger for Wednesday's session. Tuesday session lows in the pair aren't too far away, just under 6.7600. The CNY NEER edged up a touch, now close to 126.50 (J.P. Morgan Index). Today delivers Dec CPI and PPI data.

• The market looks for +1.8% y/y for headline CPI (1.6% prior), -0.1% y/y for the PPI, (-1.3% y/y prior).
• Late yesterday Russia reported it will resume FX operations in the yuan from this Friday, which will involve buying or selling the yuan for rubles depending on the state of oil revenues.
• USD/CNH initially moved lower on the news, but didn't see follow through. Shortfalls in oil revenue can obviously result in yuan sales.
• Elsewhere, the China Golden Dragon index managed to post a 0.23% gain for Wednesday's NY session. Onshore equities faltered yesterday; the CSI down close to 0.20%. North bound equity flows remain firm though, up another 7.6bn yuan yesterday.