Chinese bonds’ biggest bull run in a decade stumbles as re-rated stocks take the spotlight
China's decade-long bond market bull run has stalled due to the central bank's cautious approach to monetary easing and a shift in investor sentiment towards the stock market. This has led to a sell-off in debt, pushing the yield on the benchmark 10-year government bond to a three-month high of 1.83 per cent, a significant increase of 15.4 basis points this year. The uncertainty surrounding the implementation of monetary policy and the stabilization of economic fundamentals has further dampened investor confidence.
Analysts at Huatai Securities and Great Wall Securities predict the turmoil in the fixed-income market will continue, with the yield on 10-year bonds potentially reaching 1.9 per cent or even 2 per cent. The People’s Bank of China's Governor Pan Gongsheng signaled a more discretionary approach to interest rate and reserve requirement ratio (RRR) cuts, deviating from previous assurances, which has been interpreted as a potential delay in easing monetary policy and contributed to the shattered expectations of a sustained bull market.
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China's decade-long bond market bull run has stalled due to the central bank's cautious approach to monetary easing and a shift in investor sentiment towards the stock market. This has led to a sell-off in debt, pushing the yield on the benchmark 10-year government bond to a three-month high of 1.83 per cent, a significant increase of 15.4 basis points this year. The uncertainty surrounding the implementation of monetary policy and the stabilization of economic fundamentals has further dampened investor confidence.
Analysts at Huatai Securities and Great Wall Securities predict the turmoil in the fixed-income market will continue, with the yield on 10-year bonds potentially reaching 1.9 per cent or even 2 per cent. The People’s Bank of China's Governor Pan Gongsheng signaled a more discretionary approach to interest rate and reserve requirement ratio (RRR) cuts, deviating from previous assurances, which has been interpreted as a potential delay in easing monetary policy and contributed to the shattered expectations of a sustained bull market.
via SCMP Full Text Feed
