Chinese stocks are off their lows......>

CHINA STOCKS: Chinese stocks are off their lows but still ~2% down on the day as

losses in US stocks weigh. The CSI300 has bounced off the 3100 level but bulls

need to recover 3200 to improve the outlook. HSI is also off its lows but

remains below the 25000 as the bearish trend extends. 

- The Chinext is underperforming in line with recent trends having opened down

3%, but the index remains clear of last Friday's lows. 

- With the Chinese authorities standing ready to support the market and

valuations at multi-year lows, the recent trend of Chinese equity outperformance

versus the US looks like it has legs. However, a sustained rally would likely

have to see US stocks bounce given increasingly strong cross-asset correlations.