Asia Macro Strategy Notes: CCS monitor: Receive CNH 5Y5Y; INR 3Y support near 6%

Research evidence excerpt

Asia Macro Strategy Notes: CCS monitor: Receive CNH 5Y5Y; INR 3Y support near 6%

Deutsche Bank

Research

Asia Fixed Income Date

China 12 June 2026

India Asia Macro Strategy

Notes

CCS monitor: Receive CNH 5Y5Y; INR

3Y support near 6%

Bryant Xu

We see scope for further rallies in CNH and INR CCS, but through different

Strategist

channels. In CNH, the case is increasingly structural, with lifers' demand, stronger +65-6423 5558

dim sum issuance and flush offshore liquidity pointing to receive pressure at the

back end and a flatter curve. In INR, RBI’s latest FX inflow measures create a more Jalaj Singh

Research Associate

immediate catalyst for a 3Y CCS rally, though we expect support from non-PSU

ECBs and international asset-swap investors to emerge around 6.0–6.1%.

Receive CNH CCS 5Y5Y

We recommend receiving CNH CCS 5Y5Y, as structural demand and technical flow

dynamics point to a flatter curve in the weeks ahead.

The key structural driver is the entry of onshore lifers into dim sum bonds via

Southbound Bond Connect. Lifers’ balance-sheet structure and long-duration

liabilities create natural demand for high-quality, long-tenor RMB fixed-income

assets, while offshore dim sum bonds provide diversification beyond the onshore

market. Once these investors are fully onboarded and become more comfortable

with offshore market infrastructure, we expect structural demand for long-dated

dim sum bonds to build meaningfully. This could be further supported by a potential

doubling of the Southbound Bond Connect quota to CNH1tn, as reported last year.

The technical backdrop also supports lower CNH CCS levels:

1. Dim sum bond issuance by foreign issuers has increased materially,

averaging around CNH44bn per month over the past three months.

2.