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:

  1. Disappointment over the lack of details on China’s stimulus measures.
  2. Monitoring the daily fix for insight into policymakers’ comfort with RMB’s recent price action.
  3. 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.

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