Total Derivatives: CNY curve seen steeper; CNH IRS idea

Tighter Chinese liquidity conditions backed a bid in short CNY swaps on Thursday. A continuation of this pressure is expected to drive flattening pressure across the 2s/5s slope into the end of the quarter. Meanwhile, Nomura has outlined a short-end CNH IRS trade idea, Moody's expects China's credit ratings to withstand the rebalancing challenge and the UK has tightened its CNY trading ties, writes Deirdre Yeung of Total Derivatives.