China’s World-Beating Bond Rally Is at Risk From Surging Supply
- Aug-Sept debt sales may reach 1.3 trillion yuan: Ping An Sec.
- Policymakers vow more fiscal spending in second half of year
This article is for subscribers only.
The world’s best-performing sovereign bonds are set to face a liquidity test as a long-awaited spike in municipal debt issuance finally appears on the horizon.
Expectations had been building for an acceleration in local government bond sales after Chinese authorities pledged more fiscal support for a slowing economy. Still bonds rallied on the back of a surprise reduction in bank’s reserve ratio requirement and haven bids spurred by regulatory concern.