USD/CNH drops amid risk-off, Yuan a safe haven?

• USD/CNH is flashing red as Asian stocks drop on virus fears. 
• Yuan is likely drawing haven demand as China looks to have contained the virus outbreak.

China's offshore Yuan is drawing bids amid broad-based risk aversion. 

The USD/CNH pair is currently trading at 7.1180, having faced rejection at 7.14635 in early Asia. The S&P 500 futures fell by 5% early Monday and the Asian stocks tanked with Australia's ASX 200 hitting an eight-year low on lingering concerns of a coronavirus-led recession in the global economy. 

Additionally, investors have been left disappointed by the US Senate's inability to advance the coronavirus rescue package. 

Even so, the offshore Yuan is gaining ground against the US dollar and China's 10-year bond yield is reporting losses. The benchmark yield is currently trading at 2.71%, representing a four basis point drop on the day. 

Investors seem to be treating China's yuan and government bonds as safe-haven assets. After all, the world's second-largest economy seems to have contained the virus outbreak. The nation had zero cases of novel coronavirus on March 18-20, including in Wuhan, the epicenter of the epidemic.

Technical levels