USD/CNH To 7.2150 Post NFP, Regulator Vows To Stabilize Equity Markets

The US NFP beat on Friday saw USD/CNH break higher. From close to 7.1900 the pair surged above 7.2150, before finding selling resistance. We track around this level in early trade today, having lost 0.37% for Friday's session. USD/CNY finished up at 7.1935 on Friday so a decent discount to USD/CNH. The CNY NEER (J.P. Morgan index) rose 0.24% to 124.18, as the yuan outperformed the broader USD bounce.

• Today on the data front we have the Caixin services PMI for Jan. The market consensus is for a 53 outcome, prior was 52.9. The composite Caixin PMI is also due, the prior read was 52.6 (there is no consensus for this outcome).
• A stronger focus point though is likely to be on local equity market sentiment. Onshore markets finished up from lows on Friday in volatile, but still 1.18% weaker for the CSI 300 and 1.46% for the Shanghai Composite.
• There didn't appear a direct catalyst for the weakness, although state support may have aided a modest rebound (see this link for more details). In US trade on Friday, the Golden Dragon index lost 1.62%.
• Over the weekend the China Securities Regulatory Commission stated it would stabilize market sentiment, without going into specifics (see this BBG link).
• US Presidential candidate Donald Trump also stated tariffs on China imports would be hiked if he returns to office, reiterating calls he made in late Jan.