Economics
China Bond Traders Reckon With Central Bank That Won’t Budge
- PBOC has allowed last week’s massive cash injections to mature
- Sovereign bonds are dropping at the fastest pace since April
The People's Bank of China in Beijing.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
China’s central bank has helped trigger a massive sell-off in government debt by doing nothing at all.
The People’s Bank of China disappointed bond traders by skipping open-market operations every day this week -- effectively withdrawing 560 billion yuan ($79 billion) from the financial system. It has also wrong-footed bond bulls by not deploying a one-year targeted lending tool, despite the move being widely expected since last week.