EU CREDIT UPDATE: CREDIT UPDATE: US Open

USD/CNH moves below CNH7.20 remain relatively shallow after the USD pared losses in pre-NY trade (e-minis hold a little lower with an eye on Nvidia earnings).

• Lows of CNH7.1811 were printed before the move back to the CNH7.20 zone.
• Initial support (Feb 7 low CNH7.1888) was breached on the move.
• The next bearish target is located at 50-DMA (CNH7.1804), followed by the Jan 31 low (CNH7.1728).
• A breach of the latter would turn the technical tide a little more in the favour of yuan bulls.
• In terms of yuan-specific drivers, the continued swelling of the property development financing “whitelist,” mainland equity bid and related HK-China Stock Connect inflows (highest net buying since Jul ’24 at CNY13.6bn) were supportive for the yuan in Asia hours.
• Participants remain eager for more Chinese market-specific & broader policy support.
• Reports of further trading restrictions showed up after hours, with BBG sources flagging a ban of net equity sales around market open and close.
• CNH TN funding has loosened a little post-Chinese NY.

• House Republicans are privately concerned that Congress could be heading towards a government shutdown in early March as Speaker Mike Johnson (R-LA) struggles to outline a clear strategy for FY2024 spending bills.
• The US vetoed an Israel-Hamas ceasefire resolution at the UN yesterday, arguing the resolution could imperil multilateral negotiations to secure the release of hostages and implement a six-week pause in fighting.
• A new "major" package of sanctions on Russia, to be unveiled on Friday, will target, "a range of different elements of the Russian defense industrial base and sources of revenue for the Russian economy..."
• Longshot presidential candidate Nikki Haley has pledged stay in the Republican race beyond Saturday's primary election in South Carolina where she is expected to lose heavily to former President Donald Trump. Although Haley has virtually no chance of securing the nomination, she is likely eyeing leadership of the GOP in the long-term.
• President Biden’s brother will appear before the House Oversight and Judiciary committee today for a private disposition.
• The White House plans to bolster security at US ports with a USD20bn package of loans and grants.
• A bipartisan group of Senators are preparing to unveil a resolution condemning Hungary for democratic backsliding, curtailing media freedom, and a “deepening relationship with Russia and China.”
• US Secretary of State Antony Blinken met with Brazilian President Lula in today ahead of a G20 foreign ministerial.
• Poll of the Day: Former Maryland Governor Larry Hogan could make deep blue Maryland a competitive Senate race.