CHINA RATES: China Repo Rates Diverge On Wednesday

USD/Asia pairs are tracking higher in the first part of trading today. This is consistent with the majors, where the USD indices are tracking higher, with the BBDXY +0.20% to 1240 at this stage. Negative leads are evident in the equity space, with key regional bourses lower, while US futures are down -0.40% for eminis, -0.55% for the Nasdaq. We are slightly away from worst levels though.

• The USD/CNY fix was close to neutral, i.e. not pushing back aggressively against recent yuan weakness. USD/CNH touched a high of 6.8463, but we are now back around the 6.8400 level. Some resilience is evident in terms of China equities, which is helping at the margin.
• 1 month USD/KRW touched a high just above 1273, but we are now back to the 1272 region. The first 10-days of trade data for February still suggested a challenging external demand backdrop. Average daily exports were down -14.5% y/y and the trade deficit remained wide near -$5bn.
• Other USD/Asia pairs are mostly higher, albeit to varying degree. USD/MYR back near 4.3600, while spot USD/TWD is around 30.24/25. SGD FX is weaker, but outperforming these trends slightly, with USD/SGD at 1.3315/20 last, just +0.10% higher for the session so far.

AUDUSD has been trending down during today’s APAC session. It is currently 0.2% lower than Friday’s finish at around 0.6903, close to the intraday low, as equity markets are down. The USD DXY is up 0.1%.

• AUDUSD remains above initial support of 0.6956. It reached an intraday high of 0.6940. AUDNZD is down slightly at 1.0963 while AUDJPY is stable at around 90.94. Aussie is down 0.1% against both the euro and pound at 0.6472 and 0.5732 respectively.
• Equity markets are down across the region despite the US rising on Friday. The ASX is down 0.2% and Hang Seng -1.3%. The risk off move has seen commodities fall as well. WTI is down 1.1% to under $79/bbl after rising over 2% on Friday. Copper prices are down 0.5% and iron ore almost $2 to $122/t.
• Later the focus is likely to be on Fed Governor Bowman ahead of US CPI on Tuesday, as data is scarce. Tomorrow in Australia Westpac consumer sentiment and the NAB business survey are released.

The USD/CNY fixing printed at 6.8151, versus a Bloomberg consensus of 6.8146.

• Today's fixing outcome represents a +5pip surprise in USD/CNY terms. This compares with -4pips on Friday, so still very close to neutral from that standpoint.
• The 5-day rolling sum of the error sits at -54pips.
• USD/CNH is tracking higher in the first part of trade. We are around 6.8335/40, through highs from last Monday. This is fresh highs back to early Jan for the pair.