China disappoints, but the yuan remains strong

The sixth decline of the S&P 500 in the past seven sessions set a negative tone for equity trading in the Asia Pacific region, and the poor Chinese data did not help matters.  News that China's troubled Evergrande would miss next week's interest payment weighed on sentiment too.  Only South Korea and India of the large markets in the region managed to escape unscathed, even as North Korea tested ballistic missiles for the second time in a week.  European bourses have also eased, falling for the second consecutive session and six of the last seven.  Meanwhile, US futures are posting small gains.  The US 10-year note has also stabilized around 1.27% yield.  Yesterday's rally in the US saw Asia Pacific yields ease, except in China.  European yields are softer too. The dollar is trading with a heavier bias.  The Scandis and the yen and Swiss frac are leading, while the dollar-bloc and sterling are lagging.  Emerging market currencies are also mostly higher today, and the JP Morgan index is firmer.  It would be the fourth gain in the past five sessions if sustained.  Despite the disappointing data, the Chinese yuan remains firm, leaving the dollar weaker than the CNY6.45-CNY6.50 band that has confined the greenback since mid-June.  Gold posted an outside up day yesterday, but no follow-through buying has seen some late longs exit, pushing the yellow metal back below $1800 in Europe.  News that China's steel production fell weighted on iron ore prices, which have now fallen in 11 of the past 12 sessions.  Copper is rising for the first time in three sessions.  Oil prices are firm, with the November WTI contract trying to establish a foothold above $71.00. API reported a 5.4 mln barrel drawdown and if confirmed, would leave US inventories at two-year lows.