Chinese Bonds Complete Worst Month in Year as Yuan Extends Loss
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Chinese sovereign bonds posted their the steepest monthly loss in a year amid speculation authorities will refrain from easing monetary policy after the U.S. signaled higher borrowing costs as early as next month. The yuan fell by the most this month since the August devaluation.
The yield on 10-year government bonds climbed nine basis points since the end of April to 2.98 percent in Shanghai, the highest level since December, ChinaBond data show. The yuan fell 1.6 percent this month to 6.5846 per dollar as of 4:50 p.m. in Shanghai, bringing losses in the second quarter to 2.1 percent. Federal Reserve Chair Janet Yellen said on Friday higher interest rates in the coming months look “appropriate.”