USD/CNH has traded with a positive bias in the first part of Friday trade. We were last near 7.1550, around 0.15% weaker in CNH terms. This is against a generally softer USD/Asia trend, although a good of this reflects catch to USD weakness post yesterday's onshore closes. The USD has stabilized against the majors though.

• Thursday highs for the pair rest at just above 7.1600. Note we are just sub the simple 200-day MA (7.1561)
• The deposit rate cut from major local banks is weighing on onshore bond yields. BBG notes the 20yr yield is back to lows from 2005 (see this link). The 2yr yield is back to 2.325%, while the 10yr yield is back near 2.61%, lows back to Sep of this year
• This has aided some stability in US-CH yield differentials, the 2yr spread, up modestly from recent lows to +204bps.
• Equity sentiment is working the other way, with onshore and HK equities firmer in the first part of trade.