China Ramps Up Warning on Bond Frenzy
- Newspaper backed by PBOC says bond selling a possibility
- China’s debt continues to rally amid bets on further stimulus
The People's Bank of China (PBOC) building in Beijing.
Photographer: Andrea Verdelli/BloombergThis article is for subscribers only.
China escalated a battle against investors betting on an extended rally in government bonds, hinting the central bank may sell some of its own holdings to cool the advance.
The People’s Bank of China could step into the market to sell bonds if demand for the haven assets continues to rise, according to a newspaper backed by the monetary authority. Leveraged bond-buying not only amplifies volatility but raises the risk of large losses in the event of a market reversal, it warned.