USD/CNH was aided U.S.-China tensions....>

CHINA YUAN: USD/CNH was aided U.S.-China tensions over Hong Kong & a slightly

weaker than expected PBoC fix. The rate added ~160 pips and trades at CNH7.1006.

- The yuan sold off alongside risk assets as Chinese Foreign Ministry threatened

to deploy "strong countermeasures" it the U.S. enacts a Hong Kong Bills passed

by the House of Representatives. The legislation would make upholding Hong

Kong's special trading status contingent on annual assessments of the city's

autonomy from Beijing, as well as provide for punitive measures against

individuals undermining HK's "fundamental freedoms & autonomy."

- A clean breach of the 50-DMA at CNH7.1102 would play into the hands of bulls,

drawing their attention to the CNH7.1674-84 resistance zone from the three

consecutive highs of Oct 8-10. Bears look for a throwback under the 23.6%

retracement of the YtD range at CNH7.0723. A break below the level would open up

the Oct 14 trough at CNH7.0503.

- On the data front, Chinese docket this week is headlined by Friday's Q3 GDP

and monthly economic activity indicators. It goes without saying that U.S.-China

matters retain the spotlight.