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Despite positive news in the form of....>

CHINA RATES
CHINA RATES: Despite positive news in the form of a large beat in the Caixin
Services PMI (53.8 vs 50.7 exp.) and news of Chinese concessions in the ongoing
trade dispute with the US, Chinese yields continue to drop.
- 2-year interest rate swaps are down 4bps at 2.71%, breaking below the Oct lows
to bring the Aug ytd lows into focus at 2.6450%. 10-year futures are just off
their daily highs but still up 25 ticks. The yield curve has also seen some
flattening over recent days. 
- The failure of yields to rise in spite of positive headlines and the recovery
in Chinese stocks suggests that expectations are rising that the PBOC will
embark on considerable loosening measures, even as the economic backdrop
improves. 

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