(Bloomberg) -- China’s early successes at curbing a government-bond rally are fast evaporating.Most Read from BloombergBiden Invests $100 Million to Fuel...
Sovereign yields fell across the curve on Wednesday morning, with those on seven-year bonds sliding the most since 2022, as traders digested the first bank loan contraction in nearly two decades. The data cemented bets that the People’s Bank of China will have to ease monetary policy further, undermining this week’s yield rebound, which was triggered by a slew of measures to squeeze out speculators.
Beijing has widened its battle against speculators, targeting everything from fund houses to rural banks, in a bid to pull government yields off record lows. The lower they fall, the more authorities are on edge, as any sudden reversal could send shock-waves through a sluggish economy. Sovereign bonds seem to be a rare bright spot in China’s financial markets this year, rallying on the back of expectations of more interest rate cuts. The benchmark yield tumbled to a record low of around 2.12% earlier this month.On Wednesday, the yield on seven-year government bonds dropped three basis points to 2.07%, while the 10-year yield was little changed around 2.19%. Yields hit a record low at an auction of 20-year special government bonds, while a gauge of onshore stocks slipped 0.6%.
Thailand's Constitutional Court met on Wednesday to rule on whether Prime Minister Srettha Thavisin should be removed from office over an ethics case. Srettha, who has been in power for less than a year, is accused by a group of former senators of breaching ethics rules by appointing a lawyer with a criminal conviction to his cabinet.
Government Bonds China Bank Of China Wednesday Morning
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