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USDCNH trades back to flat on the day....>

CHINA YUAN
CHINA YUAN: USDCNH trades back to flat on the day after early weakness found
some support ahead of Wednesday's low of 6.7590 despite a resumption of the
equity rally which has seen all mainland indices gain 2%+. The positive
equity-yuan correlation has broken down over the past few weeks as equity gains
have failed to lift Chinese bond yields, keeping US-China yield spreads near
cycle highs.
- EURCNH has seen a slight upside reversal after failing to hold Friday's lows,
while the yuan remains on the front foot against Asian crosses, with CNHKRW
remaining clear of the 166 level. 
- The strong rebound in money and credit growth seen in Friday's report shows
that the PBOC's easing policies are working, and while this may help support a
cyclical economic recovery, the yuan is likely to be a longer term victim.

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