China Government Bonds Give Up Gains as Traders Rush to Stocks
- The 10-year yield tested historic low before rebounding
- Traders split on path for yields after hints of more easing
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China’s benchmark bond yield rebounded from a historic low after the central bank’s widespread stimulus package pushed bullish investors away from the bond market and toward stocks.
The yield on China’s 10-year government bonds declined to a record low of 2% after the People’s Bank of China unveiled measures including a policy rate cut and lower reserve requirement for banks. But the potential economic implications of these moves and plans to support the stock market fueled risk appetite and sent bond yields higher once again.