Yuan Slightly Unnerved As Chinese Industrial Profits Growth Slows

Spot USD/CNH popped higher upon the release of China's industrial profits data for the month of September, which showed a deceleration in profit growth. Headline figure rose 10.1% Y/Y in Sep vs. a 19.1% increase in Aug, albeit YtD profits fell 2.4% Y/Y vs. a 4.4% decline in the Jan-Aug period. The PBoC fix came at CNY6.6989, slightly above the BBG est. of CNY6.6970, provoking little immediate reaction. The rate last trades +25 pips at CNH6.7032.

• Beijing retaliated against U.S. measures targeting Chinese media outlets and banned six U.S. names on Monday. It also announced forthcoming sanctions against U.S. defence companies involved in arms sales to Taiwan. Later in the day, the White House backed a potential sale of anti-ship missiles to the self-ruled island.
• Bulls need a firmer push higher, past 23.6% recovery of the May 27 - Oct 21 sell-off/Oct 13 high at CNH6.7620/53, to gain some momentum. Above there opens the 50-DMA at CNH6.7878. Bears look for a drop under Oct 21 YtD low of CNH6.6278, towards the psychological CNH6.6000 figure.
• Any fallout from the ongoing CPC Central Committee meeting & Saturday's official PMI data will provide interest going forward.