USD/CNH Remains Within Recent Ranges

USD/CNH got close to mid July highs near 6.7900 post the Asia close overnight, but settled back in the low 6.7700 range by the NY close. This morning we are slightly higher (last 6.7750), as broader risk appetite has softened a touch. Near term support appears evident just below 6.7700 for now.

• The domestic data calendar remains light. Only FX settlement data, for June, prints today, but is unlikely to shift sentiment a great deal. Things are quiet until next Wednesday when industrial profits data is out.
• Housing remains the domestic focus point. The local regulator is pushing for stalled housing projects to be completed, which follows the consumer mortgage boycott.
• Capital flow momentum also continues to wane. Offshore investors sold local bonds in June for a fifth straight month, while northbound equity flow momentum has also eased considerably.
• China equity outperformance has continued to unwind against the rest of the world. The China Golden Dragon index did rise over 1.6% overnight. The regulator wrapped up a year long probe of Didi Global. The market may be hoping the worst of the tech crackdown is now behind us.
• Still, this has to be balanced against fears around the growth backdrop. Shanghai metro rail passenger volumes remain below Jan/Feb highs from earlier in the year.