Yuan Knee-Jerks In Response To Softer Than Expected PBoC Fix

A weaker than expected PBoC fix failed to leave any lasting mark, inspiring but a knee-jerk higher in spot USD/CNH. China's central bank fixed its central USD/CNY mid-point at CNY6.7872, above the BBG estimate of CNY6.7815 and weakening the fixing by the most since April. USD/CNH topped out at CNH6.8008 after the fix, but has wiped out gains since and last trades -32 pips at CNH6.7897.

• Duelling comments from Chinese and U.S. authorities cast doubt on the Oracle/TikTok deal and the devil was in the details. Differences have emerged over the preferred ownership structure of the new TikTok Global company and national security concerns on both sides.
• Chinese President Xi and U.S. President Trump will deliver back-to-back speeches at the UN General Assembly tomorrow, their rhetoric will be scrutinised for any fresh signals re: bilateral tensions.
• Worth re-capping our exclusive piece published yesterday, which cited policy advisors as noting that China's export growth will remain strong, but a firmer yuan and increased competition from global manufacturers restarting their businesses will eventually exert brakes.
• Bears need a dip through Sep 16 low of CNH6.7424 to reinstate the broader downtrend and bring Mar 21 low of CNH6.6704 into view. Bulls see yesterday's high of CNH6.8079 as their initial target and a break here would open up Sep 9 high of CNH6.8610.
• Final Chinese BoP current account balance is due Friday.