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GILT TECHS

(M1) Key Support Zone Exposed

SCHATZ TECHS

(M1) Clears Congestion Support

BOBL TECHS

(M1) Bearish Activity Resumed

BUND TECHS

(M1) Key Support Exposed

CHINA RATES

China Repo Rates Rise on Wednesday: Wind

CHINA PRESS

PBOC Unlikely Change Policy Rates in 2021: CITIC

Yuan Stable After Chinese Data Dump

CHINA YUAN

Spot USD/CNH operates close to neutral levels, shrugging off China's monthly economic activity indicators. The PBoC fix was marginally stronger than expected and provided virtually no impetus. The rate last deals -10 pips at CNH6.9470.

  • China's industrial output and retail sales missed expectations on a Y/Y basis, while property investment was better than forecast. The unemployment rate was steady at 5.7%, as expected.
  • U.S. President Trump mentioned China during his latest presser, noting that he has a bad attitude towards the coutry. He refused to engage with Beijing on Tiktok and WeChat. Earlier, the U.S. labelled Chinese Conficius Institute U.S. Centre as foreign mission.
  • Meanwhile, cross-Strait geopolitical tensions continue to escalate. China's military held live-fire drills in the Taiwan Strait, while the island announced a 10% boost to defence spending.
  • Yesterday's low of CNH6.9276 provides the initial bearish target and a break here would open up Mar 9 low of CNH6.9049. On the flip side, bulls look to take out Aug 7 high of CNH6.9764 before targeting Jul 30 high/50-DMA at CNH7.0171/7.0204.
  • The main point of note on China's docket next week is the monthly LPR fixing, slated for Thursday.
MNI London Bureau | +44 203-865-3806 | krzysztof.kruk@marketnews.com