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CHINA:  Futures Uptrend Stalls as Bond Rally Takes Breather. 

CHINA
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  • Last week’s decline in interbank liquidity (it appears) could be targeted at bond bulls who have relentlessly pushed bond yields lower.
  • The benchmark 10YR future has traded above all major EMA levels since late October last year as bond bulls took over, dragging yields lower.
  • Recent developments have seen a modest pullback in the 10YR future to 109.1 where it is steady today, above the 20-day EMA of 108.9618.
  • Other EMA levels: 50-day EMA 108.2276, 100-day EMA 107.3791 200-day EMA 106.4696.
  • China’s 5YR future is up +0.05 today at 106.515 and 2YR future is up +0.38 to 102.816.
  • The Lunar New Year holidays sees China out Jan 28-Feb 04 inclusive and it is likely that the Central Bank will provide liquidity leading into the holiday period which could see the resumption of the upward trend.
  • Key data out this week: Industrial Profits Jan 27, PMI’s 27 Jan.   
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  • Last week’s decline in interbank liquidity (it appears) could be targeted at bond bulls who have relentlessly pushed bond yields lower.
  • The benchmark 10YR future has traded above all major EMA levels since late October last year as bond bulls took over, dragging yields lower.
  • Recent developments have seen a modest pullback in the 10YR future to 109.1 where it is steady today, above the 20-day EMA of 108.9618.
  • Other EMA levels: 50-day EMA 108.2276, 100-day EMA 107.3791 200-day EMA 106.4696.
  • China’s 5YR future is up +0.05 today at 106.515 and 2YR future is up +0.38 to 102.816.
  • The Lunar New Year holidays sees China out Jan 28-Feb 04 inclusive and it is likely that the Central Bank will provide liquidity leading into the holiday period which could see the resumption of the upward trend.
  • Key data out this week: Industrial Profits Jan 27, PMI’s 27 Jan.