China’s Rising Sovereign Yields Are Stirring Its Corporate Bonds
The People's Bank of China headquarters in Beijing.
Photographer: Giulia Marchi/BloombergThis article is for subscribers only.
A sell-off in China’s sovereign notes is weighing on its corporate bond market.
The yield spread between the country’s top-rated three-year corporate bonds over government securities of the same tenor widened this week to its highest in four months, according to data compiled by Bloomberg. That’s after the 10-year sovereign bond yield rose to the highest in five months. It’s also hit sales of new company bonds, with the most amount of cancellations this month since June.