China onshore IRS are biased up on expectations that inflation in December is likely to accelerate on higher food prices. The one-year IRS is unchanged at 3.30%-3.40%, and the five-year IRS is up 2 bps at 3.70%-3.80%. The CPI, China's primary gauge of inflation, likely rose 2.4% in December from the same month a year earlier, up from a 2.0% rise in November, according to the median forecast of 16 economists polled by Dow Jones. The data are due Friday. A Shanghai-based foreign bank trader also says the swaps are supported as liquidity may tighten when the Lunar New Year Festival comes in February.
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