China bond yields dip after flags more easing

  • Markets
  • Wednesday, 19 Jan 2022

SHANGHAI: Chinese government bond yields fell across the curve on Wednesday after the central bank's vice governor said it would roll out more policy measures to stabilise the economy amid signs of weakening growth momentum.

China's central bank "should hurry up, make our operations forward-looking, move ahead of the market curve, and respond to the general concerns of the market in a timely manner," People's Bank of China Vice Governor Liu Guoqiang said on Tuesday, calling for policies conducive to economic stability.

Liu's comments followed an unexpected cut to borrowing costs for medium-term loans on Monday, as fresh economic data showed signs of weakening consumption and a property downturn, despite a robust headline growth figure.

"The bond market rally will persist for a while as investors digest. I don't really think the dovish comments from (Liu) were the trigger. In essence, it was the unexpected rate cut," said a trader at a Chinese bank, who was not authorised to speak to the media and declined to be named.

The benchmark 10-year yield fell as much as 5 basis points to a low of 2.71% in early trade on Wednesday, its lowest since June 2020. The drop narrowed the spread between Chinese and U.S. 10-year yields to about 83 basis points, its narrowest since May 2019.

The five-year yield dipped 4 basis points to 2.42%.

"Don't fight the central bank," Qin Han, analyst at Guotai Junan Securities, said in a note. "Monetary loosening is the card on the table" Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

bonds , China , People's Bank of China


Next In Business News

Dell results surpass estimates on strong PC demand; shares jump
Oil price rises to 2-month high on tight supplies
World shares climb, US$ falls on relief over Fed's flexible stance
Chipmaker Broadcom to buy VMware in US$61bil deal
Axiata gets shareholder nod for Indonesia’s Link Net stake buy
Iris signs RM1.12bil KDN job
Higher UEM Sunrise cost within ‘range of tolerance’
Masteel 1Q results soar on higher prices
Former CEO of EPF to join PetDag
EITA unit clinches TNB contract

Others Also Read