Economics
China Bonds Rally as PBOC Easing Sends Interest-Rate Swaps Lower
- Yuan erases loss amid signs it will win IMF reserve status
- Stimulus "adds fuel to the risk-on environment," ING says
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China’s bonds rallied and interest-rate swaps fell the most in two months after the central bank cut borrowing costs for the sixth time in a year and eased lenders’ reserve requirements.
The yield on sovereign bonds due July 2025 fell four basis points to 3.04 percent as of 4:53 p.m. in Shanghai, the lowest for a benchmark 10-year note since January 2009. The cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repurchase rate, sank 10 basis points to 2.29 percent. The yuan declined and the Shanghai Composite Index of shares rose to a two-month high.