Source: Bloomberg
The rise of Chinese bonds has entered an unprecedented field. The focus of investors' attention is that the central bank will eventually decide to drive speculators out of the overheated market, or let the market be hot to benefit the economy.
As investors have shifted to China's safest assets due to their stock fell, their housing prices fell, and the deposit interest rate was not attractive, the yield of China Treasury bonds has reached a new low.The reference 10 -year Treasury yield fell below 20 years ago, and the level of 2.15%was far lower than the level that the trader would intervene.
For a few months, the official has been in dilemma -the economy has been doing a good job of borrowing costs to help boost demand, but it may not be able to cope with the violent market fluctuations that may cause liquidity to promote the foam.Until last week, the Central Bank of China seemed to be ready to involve and sell national debt, and then unexpectedly turned to interest rate cuts to stimulate the economy.
Investors also have their own adjustments. Some people believe that officials may take action; some people point out that the continuous rise in bonds is a solid fundamental reason.
ING Bank's chief economist Lynn Song said that if the rise is too far and too fast, the People's Bank of China may begin to intervene by selling national debt.Nevertheless, as investors continue to seek a source of security income, some purchase needs may continue to occur in the short term of Chinese bonds.
The statement of Chinese President Xi Jinping, which was disclosed earlier this year, called on the "gradually increasing the sale of government bonds" in the open market operation of the central bank, so that the central bank's idea of buying and selling national bonds has attracted market attention.It is regarded as a long -term plan to improve the management of the liquidity of the financial system.
The central bank said earlier this month that it has signed bond borrowing agreements with several major financial institutions. These financial institutions can be borrowed for medium- and long -term government bonds "hundreds of billions".This shows that it is considering selling national debt and thinking that the bond market has been cooling down this year.
