CNH: USD/CNH Near 50-day EMA Support, China Listed Stocks Up In the US

In local morning trade, the NZGB 10-year is 1bp cheaper after US tsys finished near NY session cheaps on Friday. Early support evaporated following the December manufacturing ISM survey. 

• The ISM survey beat expectations but still pointed to soft if improving sectoral dynamics. The headline reading of 49.3 improved from 48.4 prior and a 9-month high, besting the survey expectation of 48.4.
• US curves finished with mildly flatter. US projected rate cuts through mid-2025 were steady to lower vs. Friday morning's levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -13.2bp (-14.4bp), May'25 -17.8bp (-19.5bp), Jun'25 -26.5bp (-28.2bp).
• This week, economic data and US Treasury supply are brought forward to accommodate Thursday's "day of mourning" to honour President Carter. The Federal holiday sees most markets closed; the exception so far is CME rates, which will operate on a shortened session.
• Thursday's weekly jobless and continuing claims will be released on Wednesday according to the Dept of Labor site.
• Swap rates are 2bps higher.
• RBNZ-dated OIS pricing is slightly mixed. 54bps of easing is priced for February, with a cumulative 130bps by November 2025.
• The local calendar is light again this week, with tomorrow’s ANZ Commodity Prices as the sole release. 

The US bank on property developments and the policy/CNY outlook into early 2025. 

Goldman Sachs: Property sales higher than year-ago levels: Our latest high-frequency tracker shows that both new and existing home sales are notably above year-ago levels in top-tier cities. For example, the 30-city daily new home sales have increased nearly 40% yoy and the 16-city daily existing home sales have risen more than 50% yoy. These are consistent with the views of our property equity research team and our own research that China's property market stabilization will likely be led by top-tier cities. That said, given the significant inventory overhang in lower-tier cities, property prices at the national level have further room to fall and homebuilding activity is likely to remain depressed for years to come.

Policy news: Although more details about this year's monetary and fiscal arrangements will only be unveiled at the "Two Sessions" in early March, recent policy announcements provided some clues. The Q4 Monetary Policy Committee (MPC) statement pledged to accelerate credit extension in early 2025 and to cut RRR and the policy rate at the appropriate time. Interestingly, the emphasis on FX management changed from "flexibility" (弹性) to "resilience" (韧性), suggesting a shift toward controlling the speed of depreciation upon US tariff announcements. On January 3, the National Development and Reform Commission (NDRC) held a press conference and announced that the government-subsidized consumer goods trade-in program will be expanded to products such as smart phones, computer tablets and smart watches in 2025."

The highlights of the week are likely to be November CPI on Wednesday and retail sales on Thursday. There are no RBA events.

• Today final December S&P Global composite/services PMIs print. The preliminary reads were very close to the breakeven-50 level at 49.9 and 50.4 respectively, implying little if any growth.
• November CPI is released on Wednesday and is likely to be watched closely ahead of Q4 data on January 29. It will also include more updates for services components than the October release. Bloomberg consensus is forecasting headline to pickup 0.1pp to 2.2%. Trimmed mean was 3.5% the previous month.
• Retail sales for November are on Thursday and forecast to rise 1.0% m/m after 0.6% but that would see the annual rate drop due to base effects. This would be the 8th consecutive non-negative reading though suggesting some recovery. The series is due to be replaced by household spending around mid-year. The November update is out on Friday and projected to rise 0.6% m/m to be up 2.5% y/y after 0.8%/2.8%.
• November building approvals are out on Tuesday and are expected to fall 1.0% m/m after the sharp 4.2% increase in October. The multi-dwelling component can make this series volatile.
• December employment is published on January 16 but before then Q4 job vacancies are released on January 8. They have fallen every quarter since Q3 2022.
• Also on Thursday November trade data print with the surplus expected to narrow slightly to $5.55bn. Lower commodity prices have weighed on export growth.