JPMorgan Asset Cools on China Bond Frenzy as Curve Flattens
- Worries about growth have driven yields to record lows
- Narrowing 2s10s gap heightens risk of PBOC intervention: Yang
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A relentless rally in Chinese bonds has at least one global investor taking pause as yields continue to plumb record lows.
JPMorgan Asset Management is taking a break from pursuing gains in China’s government debt with the benchmark 10-year yield trading just above 2.10%. It’s concerned the yield gap between short- and long-term bonds will narrow to levels that will cause policymakers to intervene, according to Andrea Yang, the firm’s China macro strategist for global fixed income, currency and commodities.