SHANGHAI (Reuters) – Chinese language market rates of interest are unlikely to rise rapidly within the close to time period regardless of the current sharp rise in US bond yields, the China Securities Journal stated on Thursday.
Chinese language bonds have been “desensitized” to their US counterpart because the financial cycles of the world’s two largest economies diverged, in response to a remark in state media, including that home charges have additionally already factored in l impression of macroeconomic coverage adjustments.
The newspaper stated additional market price hikes in China have been contained as two coverage charges – the rates of interest on open market operations and the Medium-Time period Lending Facility (MLF) – have been secure with no indicators of rising within the brief time period. .
Expectations for inflation and the economic system as an entire have been secure whereas provide and demand within the bond market have been balanced within the first quarter of this 12 months, he added.
“Macroeconomic conditions each at house and overseas have typically improved and (we should always) pay shut consideration to cost developments,” the newspaper stated.
“In the meantime, authorities bond issuance might speed up within the second quarter, resulting in rising stress on provide, in order that the upward pattern in market rates of interest just isn’t but completed. “
The yield on benchmark 10-year US Treasury bonds has risen by round 60 foundation factors to date this 12 months, in comparison with a 10-basis level enhance for Chinese language 10-year authorities bonds within the final 12 months. similar interval, leading to decrease yield. premium.
Earlier this week, Guo Shuqing, head of China’s Banking and Insurance coverage Regulatory Fee, stated China was exploring methods to handle capital inflows to keep away from home market turmoil, with authorities “very involved. »By the danger of bubbles bursting in overseas markets. .
Reporting by Winni Zhou and Andrew Galbraith; Edited by Shri Navaratnam