With Global Bond Yields at Record Lows, Traders Buy in China
- More room seen for bond rally as yields still high versus U.S.
- A cut to benchmark deposit rate would likely help extend gain
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In normal times, China’s low-yielding government debt wouldn’t be flashing a buy signal. These are not normal times, however.
The nation’s 10-year sovereign bonds have seen their yield premium over their U.S. counterparts grow to the most in more than two years -- even as the yield on the yuan notes nears its lowest since 2002. This as the cash reward for buying global bonds is at a record low, the world’s pile of negative-yielding debt now exceeds $14 trillion and panic over the economic impact of the coronavirus is causing volatility spikes in most equity markets.