Goldman Likes China Bonds, Sees Little Scope for Yuan Rally
- Bank has 1.90% yield target for one-year China government bond
- Says strong currency not in China’s economic interest now
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Goldman Sachs Group Inc. sees benefits from owning short-dated Chinese government bonds as Beijing will likely loosen policy further to support growth, while downplaying the prospect of an appreciating yuan in a struggling economy.
“We expect more policy easing from the PBOC both in rate cuts and reserve ratio cuts,” Kamakshya Trivedi, Goldman’s head of global foreign-exchange, rates and emerging markets strategy research, said in an interview. “Taking that into account, it speaks to the broader need for easier financial conditions so I think having some exposure to the fixed income side through the CGBs for example, is something that we still like.”