Taiwan Bonds Fall as Premier Wen Says China Economy Stabilizing
The five-year yield rose to the highest level in more than a week after Wen said he is confident of achieving annual targets and the economy will continue to show “positive changes,” the official Xinhua News Agency reported yesterday. China’s gross domestic product increased 7.4 percent in the third quarter from a year earlier, matching the median estimate in a Bloomberg survey, data showed today.
“Most people think China will not have a hard landing,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “In the short term, interest rates don’t need to be that low.”
The yield on the 2 percent bonds due July 2017 rose one basis point to 0.888 percent in Taipei, according to Gretai Securities Market. That’s the highest level since Oct. 8.
Data tomorrow may show Taiwan’s export orders rose 1.9 percent last month, compared with a 1.5 percent drop in August, according to a separate survey.
Taiwan’s dollar declined 0.1 percent to NT$29.269 against its U.S. counterpart, data from Taipei Forex Inc. showed. The currency reached NT$29.142 yesterday, the strongest level since May 2. One-month implied volatility in the currency, a measure of exchange-rate swings used to price options, fell three basis points, or 0.03 percentage point, to 3.5 percent.
One-month non-deliverable forwards declined 0.2 percent to NT$29.170, according to data compiled by Bloomberg.
The overnight interbank lending rate was little changed at 0.387 percent today, a weighted average compiled by the Taiwan Interbank Money Center shows.
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