CNH: USD/CNY Fixing Makes Fresh Low, USD/CNH Eyeing Low 6.9600 Region

The USD/CNY fix printed at 7.0602, versus a BBG market consensus of 7.0495. This left the fixing error positive at +107pips, but this is very close to yesterday's error term. For the actual fixing, this is another fresh low back to 2024. This may keep the market happy in terms of keeping the downtrend in USD/CNY, USD/CNH intact. USD/CNH hasn't reacted to today's fixing at this stage the pair last near 7.0425/30, little changed for the session. So far we haven't been able to test back under 7.0400 (session lows at 7.0407).  

• CHINA SETS YUAN CENTRAL PARITY AT 7.0602 TUES VS 7.0656

Japan S&P global preliminary PMIs for December were mixed. Most focus will likely rest with the manufacturing outcome, which rose to 49.7 from 48.7 prior. The services PMI eased to 52.5, from 53.2, while the composite reading was 51.5 (52.0 prior). On the manufacturing side, while still in contraction territory it is back near highs from the middle of this year. This fits with broader sentiment measures, like the Tankan survey, which have held up reasonably well. Fears of a significant negative impact (global slowdown etc) from higher US tariff levels haven't materialized. The higher PMI reading should support IP output all else equal, although IP growth has been outperforming softer PMI trends in recent months.

• In terms of the detail, the manufacturing new orders index rose to its highest level since June 2024 (per BBG).