Chinese bonds give jump to three -month highs as investors overcome expectations

Prices for sovereign bonds in China have fallen on Monday, pushing the yield to their highest level this year, when investors cut off the posts that additional financial costs will increase growth and push a decrease in interest rate.

According to LSEG, giving a 10-year government bond China, which on the contrary, received more than 10 basic points, reaching 1.865%, their highest level this year, LSEG reports. This means growth by 25 basic points from record lows of January.

The yield of 30-year sovereign bonds rose over a 2%key psychological level to reach 2.030%on Monday, while the annual note also received 10 basic points by 1.643%. By 1 pm in Beijing, the yield received some income.

“Growth optimism has returned to China,” said Frederick Neuman, the Chief Economist of Asia HSBC Bank, said CNBC by email. “The National People’s Congress signaled a stronger position on the growth of the financial business.”

Chinese government yields rose from historical lows in January Against the background of optimism about the prospects for the economy after Officials set an ambitious growth goal Last week, about 5% in high -level work report.

Also announced Beijing A rare increase in financial budget deficit to 4% GDP . An additional 300 billion quotas on bond issue Since last year.

Bond enlargement usually makes existing bonds less attractive to investors, pushing out prices and maintaining yields.

Public bond editions can be further increased when trade tensions are intensified, said Jj Wang, Head of the Great China strategy FX and rates at BNP Paribas.

“There is still a place for a long level to fix further, a potential faster release pace of long-dated bonds, the purpose of the government to enhance the real estate and consumption market, as well as a permanent stock on capital,” Van said.

At a close monitoring press conference last Thursday, the Governor of the Central Bank, Mr. Gongsheng, repeated his position that the Central Bank would be reduce interest rates and the introduction of liquidity In the financial system by reducing the amount of cash that banks should be contained as stocks “at the appropriate time”.

Officials have repeatedly hinted at a decrease in policy levels since the end of last year, but have not yet passed.

Pan Thursday once again confirmed that PBOC wanted to keep currency stability in “Smart and balanced level.” Preventing Yuan too quickly weakening can be considered as a sign of kindness leading to any negotiations with US President Donald Trump about a trade transaction, economists said.

A Chinese marine yuan Monday lost about 0.24%to trade at 7,2588 against the US dollar.

“Bond yields in China provides counterbalance against reimbencing pressure, especially in the context of the US yield,” Neuman said. A 10-year-old Treasury US Since January, it has lost more than 50 basic points and traded about 4.2839% on Monday.

Going forward, however, Neuman said that the bond sale could “end the steam” if the Central Bank prioritize growth over the management of the currency exchange rate, and “the position of monetary policy (remains) tilted to the weakening.”

This year’s MSci China Index grew by almost 20%, while Hong Kong is on the list Hang the Index Outside global peers, flying over 18% a year.