USD/CNH Tracking Familiar Ranges, Official PMIs For Jan On Tap Today

USD/CNH was range bound through Tuesday's session. Post the Asia close we couldn't breach 7.1830 on the downside, while highs were capped at 7.1925/30, which came post better than expected US JOLTS data. For USD/CNY we ended Tuesday trade lower at 7.1778. The CNY NEER (J.P. Morgan Index) was basically unchanged at 124.14.

• On the data front today we have the official Jan PMI prints on tap. The market consensus for the manufacturing PMI is 49.3 versus 49.0 prior. The non-manufacturing PMI or services print is expected at 50.6 (prior was 50.4).
• Market expectations around easier policy settings continue to firm though, with onshore bond yields falling yesterday, with the 10yr yield hitting multi decade lows (see this link for more details).
• US-CH yield differentials are divergent though, with the 2yr spread higher, but the 10yr spread trending lower, hence perhaps why these trends have had a limited impact on CNH at this stage.
• In the equity space, to recap we had sharp falls in onshore bourses, the CSI 300 nearly off 1.8%, in the wake of the Evergrande liquidation order in HK and a combination of continued economic fear/want for policy and equity market-specific support, provided headwinds. The Golden Dragon Index fell 2.26% in US trade on Tuesday.