China Bonds Face Week of Reckoning as Loans, Key Data Come Due
- Focus is on whether PBOC rolls over all maturing policy loans
- Data may show July retail sales, factory output growth slowed
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The rally in China’s government bonds has cooled as traders pared bets for further policy easing. Data in the coming days may help determine if the gains are revived.
The first clue on the rate outlook could come from liquidity operations on Monday before 700 billion yuan ($108 billion) of medium-term policy loans fall due. Reports on retail sales and factory output expected the same day are forecast to show growth slowed in July, bolstering the case for the People’s Bank of China to lower borrowing costs.