China Bond Yields Sink to Record Low With Intervention in Focus
- State banks were seen selling long-dated bonds to cool rally
- Inflows into bonds will continue given weak economy: analyst
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China’s bond traders defied signs of intervention to push sovereign yields to a record low, setting the stage for a showdown with authorities seeking to tame the blistering debt rally.
The yield on the most actively traded 10-year sovereign notes slid to 2.065%, a level unseen since official records became available in 2002. The move came even as state banks were seen becoming more active in selling long-dated bonds in the secondary market in recent days, a sign the People’s Bank of China may have intervened to cool the rally.