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Chinese swaps have risen strongly.......>

CHINA RATES
CHINA RATES: Chinese swaps have risen strongly today in line with the rally in
CNH and Chinese stocks, with correlations between all three assets once again
rising close to 1. The 1-year swap trades at 2.82%, just below resistance at
2.8350%. The downtrend remains intact and bulls will need a move above 2.88% to
mount a more sustainable recovery. 
- The curve has remains relatively flat despite the global flattening trend and
increased fears over China's growth outlook, with the 1s-5s at 32.5bps and
2s-10s at 38.5bps. 
- The correlation between stocks, FX, and rates appears set to remain high but
stocks appear most likely to buck the bearish trend given the tailwinds provided
by low rates and a weaker yuan. 

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