Chinese government bonds have rallied to a 1.7% 10-year yield, but further gains are unlikely as the PBoC tightens liquidity and auction demand softens.
Key Takeaways
- 1.Chinese government bond yields have fallen significantly, decoupling from the rising trend in global bond yields.
- 2.The People's Bank of China (PBoC) has shifted to a less accommodative stance, starting to withdraw net liquidity from the system.
- 3.Upside for further yield declines is limited, with 10-year yields expected to remain range-bound near 1.7%.
Table of Contents
- Our view
- Required disclosures
- UBS CIO risk views
- UBS CIO valuation views
- Required Disclosures
- Producers, disseminators and their competent authorities
- Frequency of updates
- Statement of Risk
- Emerging Market Investments
- Risk Information
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Authors
Chun Lai WuClarissa TengAdela Huang
Securities
Chinese Government Bonds (10-year)Chinese Government Bonds (1-year)
Themes
Monetary Policy NormalizationGlobal Rate Divergence
Regions
Asia PacificChina