USD/CNH Tracks Near 7.01, Wednesday Session High Above 7.02

USD/CNH got to fresh highs in the 7.0225/30 region late in the Asia Pac session, before paring gains. We got back towards 7.00 in NY trade before ending the Wednesday session back closer to 7.01. More supportive risk appetite, particularly in the equity space, helped temper USD bullishness. Onshore USD/CNY spot moved above 7.00 briefly but closed at 6.9965. The CNY NEER (J.P. Morgan Index) nudged down to 124.15, -0.14% for the session.

• Nomura is the latest bank to cut its China's GDP forecasts for this year and next. BNP Paribas and Societe Generale have also lowered their CNY forecasts (SocGen to 7.30 for year end and Q1 next year, from 7.0 prior), as fallout from recent data misses and loss of recovery momentum continues.
• The next major data events are not until next Monday with the 5-yr and 1-yr LPRs, but no change is expected at this stage in light of steady MLF rates.
• 1 month USD/CNH risk reversals remain elevated, last near 0.84, while mid Feb highs came in at 0.92 for this metric. In the vol space, 1 month implieds sit slightly off recent highs, last 5.74%.
• The Golden Dragon Index lost 0.26% in US trade for Wednesday, underperforming better trends elsewhere, the CSI 300 closed down 0.45% yesterday.