CNH: USD/CNY Fixing Edges Up, Error Term Widens, CNH Steady Ahead Of Trump-Xi

• CHINA SETS YUAN CENTRAL PARITY AT 7.1055 TUES VS 7.1089

The USD/CNY fix printed at 7.1055, versus a BBG market consensus of 7.1180.

• This fixing edged lower again(Monday's print was 7.1089). The error term adjusted lower to 125 pips (from -176 pips last).
• Spot USD/CNH tracks near 7.1250 in latest dealings, down from the highs seen towards the 7.1500 area at the end of last week.

US equities stalled just ahead of their all-time highs as the market started to ask why a shutdown was good for equities ? This morning US futures have opened slightly lower on our open, E-minis(S&P) -0.05%, NQZ5 -0.05%. The JPY outperformed across the board in the crosses, NZD remains the standout to be long JPY against.

• EUR/JPY - Overnight range 173.99 - 174.65, Asia is trading around 174.25. The pair topped out around 175.00 and has pulled back as upward momentum stalled. First support back toward the 173.00/173.50 area.
• GBP/JPY - Overnight 199.35 - 200.06, Asia trades around 199.60. This pair has failed again to move above the 200.00 area. Buyers need to reassert the momentum higher again soon or the probability of a deeper pullback increases. In the middle of its recent 198.00-201.00 range, first support is seen back towards the 198.00 area.
• NZD/JPY - Overnight range 85.83 - 86.17, Asia is currently dealing 85.90. This pair worked its way through the bid around 86.20 and yesterday extended lower. While below 88.00/88.50 I continue to have a bias lower. Anyone looking for a vehicle to express a long JPY in the crosses should look to this pair, a move back below 85.00/85.50 could see the move begin to grow momentum.
• CNH/JPY - Overnight range 20.82.31 - 20.8856, Asia is currently trading around 20.8600.  The pair is topped out toward the upper boundary of its recent 20.40-21.00 range, a sustained break back above the pivotal 21.00 area is needed to signal the start of the next leg higher targeting the 21.50 area.

Fig 1 : NZD/JPY Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P