China's 10 year bond futures have.......>

CHINA RATES: China's 10 year bond futures have once again shrugged off a bumped

day in local equities, managing to hold a key support line from the Sep lows

despite some early weakness. Bulls now look to recover the 98 level to return

the focus to the range highs at 98.465. 

- In contrast, swap rates have seen some upside, with the curve 2-3bps higher

amid some slight steepening. Some divergence is seen in 10 year swaps and bond

yields, with the swap-yield spread extending its recent outperformance to 8

month highs of 6bps. 

-At a Friday briefing on January monetary supply by officials from the PBOC,

policymakers noted there have been no changes to the orientation of prudent

policies. The PBOC also played down the ongoing fall in M1 growth noting that it

reflects structural factors rather than broader liquidity conditions. It also

noted it will promote the convergence of lending and deposit rates and money

market rates. 

- The PBOC skipped open market operations for a sixth consecutive day Monday.

Liquidity remain unchanged, as no reverse repo matured today.