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The yuan has underperformed the region...>

CHINA YUAN
CHINA YUAN: The yuan has underperformed the region throughout the Asia session
despite local stocks gaining ~1%. This equity-yuan divergence looks like it has
legs, particularly with the PBOC leaning increasingly dovish. 
- USDCNH trades just off its daily highs, currently at 6.9332, after failing to
break below wits 50-dma, keeping the broader bullish trend intact. EURCNH is
back above the 7.90 level after the pair bounced off its 200-dma last week,
while JPYCNH trades at three-week highs as the recovery in equity risk appetite
fails to feed through into FX markets. 
- China's Banking and Insurance regulator re-emphasized China's prudent monetary
policy stance earlier today but traders are increasingly seeing further easing,
with a RRR cut possible before year end. 
- An additional risk facing the yuan comes from rising US corporate credit
spreads, which could put pressure on EM CDS spreads, undermining EM FX.

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