USDCNH is recovering some of.............>

CHINA YUAN: USDCNH is recovering some of yesterday's sizeable losses, keeping

the near-term outlook neutral as the pair trades at 6.9284. Bears continue to

look for a close below the 50-dma at 6.9144 while bulls target the 6.96 level,

above which down trendline resistance from the Nov 1 high would give way.

- The resilience of Chinese stocks in the face of US weakness is providing some

support to the yuan, even as emerging global credit stress is keeping CDS

spreads elevated and the dollar firms agains the majors. 

- US-China interest rate swap spreads have edged down from their highs in line

with the trend in equity market performance, providing some fundamental support

for the yuan.