CNY Fixing Modestly Stronger

The CNY fix has printed modestly stronger. The market expected the USD/CNY fix at 6.6781, while the actual print came in at 6.6756. This is a downside surprise, in USD/CNY terms, of -25pips.

• The fixing bias was very modest last week, with a cumulative downside surprise of just -11pips, i.e. nearly back to neutral. Today's -25pip surprise is the largest since the 13th of May, although still small from a longer term historical stand point.
• USD/CNH remains sub 6.6900, after decisively breaking below 6.7000 on Friday. Today's fix is unlikely to shift the narrative a great deal.
• CNH is benefiting from a broadly weaker USD backdrop, and hopes that the worst of the downside growth momentum is close to being behind us, particularly as Shanghai pushes ahead with re-opening plans.
• This comes after downgrades to the growth outlook last week from a number of sell-side analysts for 2022, note also J.P. Morgan's China forecast revision index fell by nearly 0.50%, the steepest drop since the start of March.
• In TWI terms the CNY basket still fell 0.39% last week, although this was down from the previous week's fall of 1.39%.