China Traders Add to Easing Bets as Economic Prospects Dim
- Benchmark bond yields, swaps rates both drop to one-year low
- Seven-day interbank interest rate has fallen below policy rate
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Investors are boosting wagers on another round of policy easing in China after a key factory gauge fell in July and virus cases spiked.
Bond yields and an indicator of future rates are both at one-year lows as bets swell in the rates and derivatives markets. A Politburo meeting last week added to the speculation, with leaders vowing to keep liquidity ample. Front-page articles in state media Tuesday said there’s room to further loosen monetary policy and cut bank reserves.