China's unexpected interest rate cuts indicate that the country's sovereign bonds will usher in a new round of rise.
According to Bloomberg, after the central bank unexpectedly lowered a key policy interest rate, the base point of China Treasury bonds on the benchmark 10 -year Treasury bonds once fell six base points to 2.67%.The lowest level.However, Standard Chartered Bank and Bank of Malaysia believe that the rise is far from end.
This wave may help China's sovereign bond yield break through the trading section of 15 basis points in the past six months.Against the background of China's domestic growth rate, the demand for such insurance assets has recently been suppressed because radical interest rate hikes have pushed the developed market yield.In recent months, with the rise in US Treasury bond yields, overseas investors have sold China's sovereign bonds.
Liu Jie, director of China's macro -strategy director of Standard Chartered Bank in Hong Kong, analyzed that 10 -year Treasury yields may be tentative of 2.60%to 2.65%.Be more pigeon. "She added that for China, when economic growth is still far less than the trend level, interest rate cuts to stimulate demand better than injecting liquidity.
The People's Bank of China reduced the interest rate of the 1 -year medium -term borrowing (MLF) to 10 basis points to 2.75%.Maintain interest rates unchanged.In addition, the central bank conducted a shrinking sequel to the MLF due this week, and returned to the liquidity from the banking system.
Winson Phoon, director of the fixed income research of Bank of Malayan Securities, said: "Although the seven -day reverse repurchase interest rate decreases 10 basis points, it may not open a lot of downward space for the repurchase.The signaling effect will restrict the increase in yields to increase or lower the yield. "
According to reports, the interest rate reduction at the same time as the continuation of the continuation shows that the central bank of China wants to maintain looseWorries about the rise in bond market leverage.In July, credit data showed that new loans and corporate bonds were issued soft.Last month, the total industrial added value and the total retail sales of social consumer goods were also lower than expected, and the survey rate of unemployment declined.
"Accidental interest rate cuts reflect to a certain extent that decision makers may see further downward risks facing growth prospects," said Frances Cheung, an interest rate strategist of Overseas Chinese Bank in Singapore."Coupled with the social financing data released on the weekend, it is weak to the demand for credit, and Chinese government bonds will be supported."
