Worries Weigh, Even As Some Cities Seem Set To Loosen Home Purchases Rules

USD/CNH moves to fresh YtD highs of CNH7.2927 on the back of the aforementioned USD bid.

• Some China-specific matters, namely Country Garden and Zhongzhi Enterprise Group worries, have weighed on the yuan early this week.
• Note that international investors shed Chinese equities via the HK-China Stock Connect schemes. This was the sixth straight day of net sales via those channels, the longest run seen since October ’22.
• Reports from Cailian pointing to the lowering of deposits for Chinese second-home buyers in some Chinese cities, along with looser home purchases limits, did little to boost the yuan.
• These moves were touted by the sell-side in the wake of last month’s State Council gathering, and have generally been geared towards smaller cities.
• A move beyond CNH.7.30 would open the way towards clustered resistance in the form of the Oct/Nov ’22 highs.