NDRC Press Conference: Analyzing the Lack of Details on Stimulus Measures
The recent NDRC press conference left many investors wanting more information on stimulus measures, causing a lack of follow-through in Chinese equities and impacting CNH-sensitive FX. USD/CNH is currently at 7.0582, with OCBC’s FX strategist Christopher Wong noting the disappointment in the delivery of expected news.
Market Sentiments and Risks
- Hopes were raised but not met with concrete details.
- The post-opening rally in Chinese equities has fizzled out, affecting sentiments.
- CNH-sensitive FX, including AUD, KRW, MYR, are impacted by the lack of follow-through.
Short-Term Outlook for USD/CNH
In the near term, USD/CNH is expected to face 2-way risks as markets digest several factors:
- Disappointment over the lack of details on China’s stimulus measures.
- Monitoring the daily fix for insight into policymakers’ comfort with RMB’s recent price action.
- Potential return of US exceptionalism and its impact on USD ahead of the upcoming elections.
Technical Analysis: Bullish Momentum Intact
Despite the market uncertainties, the bullish momentum on the daily chart remains intact, with the RSI rising. Key technical levels to watch for USD/CNH include:
- Support at 7.0320 levels.
- Resistance at 7.11 (50 DMA).
Analyzing the Impact on Global Markets
The lack of clarity on China’s stimulus measures and the uncertainty surrounding USD/CNH have broader implications for global markets. Investors should closely monitor these developments and be prepared for potential shifts in market dynamics.