Yuan Underperforms USD Sell-Off, Eyes On CNY Fixing Today

USD/CNH tracks near 7.3030 in early Thursday dealings. The pair got to around 7.2920 post the softer US data outcomes on Wednesday, with the ISM services miss particularly noticeable. Like elsewhere though, the USD regained some ground post the prints. For Wednesday's session, CNH gained a modest 0.05%, lagging softer USD index moves (BBDXY index down 0.25%, DXY off 0.30%). USD/CNY spot finished up just above 7.2700.

• These moves left the yuan underperforming on crosses, which is typical of USD pullbacks in recent months. AUD/CNH got too fresh 2024 highs above 4.9000, but sits slightly sub this figure level in recent dealings.
• Focus will remain on the USD/CNY fixing today, which has generally remained firm in recent sessions despite some USD softness. Yesterday's fix at 7.1312, was a fresh high back to Nov last year.
• Another higher set today for the fixing would be a clear signal for yuan bears.
• For USD/CNH, the 20-day EMA support point rests at 7.2858 on the downside, while recent YTD highs printed at 7.3114.
• The local data calendar is empty today. to recap in the equity space, the major equity indices lagged broader positive sentiment elsewhere in the region yesterday, the CSI 300 down 0.24%. Local bond yields were relatively steady, the 10yr around the 2.24% level.
• More details on the PBoC's bond borrowing plan can be seen at this BBG link , as the central bank aims to curb yield falls.