USD/CNH Steady, LPRs Seen Unchanged

USD/CNH remains range bound, continuing to draw selling interest above 6.7200, while dips sub-67000 can't be sustained. We track close to 6.7100 at the start of this week.

• The main focus today, will be the upcoming 1yr and 5yr loan prime rate fixings. The market expects no change in terms of bank rates, currently at 3.70% for the 1yr and 4.45% for the 5yr. Only a small number of surveyed economists expect a cut.
• Recall last week the 1 yr MLF rate was kept steady by the PBoC at 2.85%.
• Onshore media reports continue to focus on measures to boost the growth outlook. Shanghai Securities News reports China is planning to take 'extraordinary' measures to address waning investment momentum (see this link for more details).
• This morning we have seen a sharp drop in Singapore iron ore futures, dipping as far as $114/tonne. This is on top of last week's 14% dip. Rising inventory levels onshore and weaker demand conditions appear to be the main drivers.
• President Biden stated that he and President Xi will speak soon, without specifying a date. He also stated that he is weighing a decision on how to proceed with tariffs on China goods.