'Mother PBOC' Squeezes Traders Again as Money Market Tightens

China’s money-market squeeze is back, with sovereign bonds beginning to feel the heat as the central bank keeps liquidity on a tight leash and concerns grow about a wall of fund maturities this month.

The yield on 10-year government debt has risen on all but two of the last 13 days to reach an almost two-month high, and the benchmark seven-day money-market rate surged the most since May on Tuesday. The People’s Bank of China -- seen to be pushing an official deleveraging drive with renewed vigor following a policy meeting last month -- refrained from boosting the supply on cash in the financial system for the third day in a row.