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PBOC's Caution Sparks Sell-Off in Chinese Bond Market
2024-08-12 09:00:08
Markets
China
Economy

PBOC's Caution Sparks Sell-Off in Chinese Bond Market

Chinese 10-year bond yields climb amidst PBOC's concerns over interest-rate risks, driven by haven asset demand and increased financial investments. The central bank's warnings prompt cautious investor sentiment, with brokerages scaling back bond trading activities to avoid potential market bubbles.

Analysts advise vigilance against duration risk and anticipate higher yields due to expected monetary easing and increased bond issuance. The ongoing battle between the PBOC and bullish investors reflects a delicate balance in addressing China's economic challenges and deflationary pressures.

Related news on that topic:

Stocks Tumble Amid Disappointing Earnings and Economic Concerns

Stocks experienced a sharp decline after a strong open, as tech stocks faltered and companies such as Super Micro Computer, Dell, Nvidia, and Intel reported disappointing earnings. Disney also disappointed with its earnings. Biotech stocks, including Amgen and the Nasdaq Biotechnology Index, struggled, while bond yields rose, negatively impacting the iShares 20+ Year Treasury Bond ETF. Concerns about the economy, including the upcoming weekly jobless claims report and uncertainty about the future, weighed on sentiment. The consensus estimate for jobless claims is higher than expected, raising further worries. Market recovery from Monday's slump was also challenging. The key question now is whether the market will retest Monday's low for the S&P 500 before a real recovery can begin. In addition to these concerns, yen-carry-trade unwinding, a potential rate cut, and geopolitical factors have added volatility to the markets. The stock market rally attempt on Tuesday provided some relief, but a follow-through day is still needed to confirm a sustained recovery.

China's Stocks Resilient Amid Global Sell-Offs: Signals for ... Investing

Despite global volatility, China's stock market outperformed Nasdaq and Nikkei. Foreign investors are selling China A-shares, but U.S. rate cuts and yen carry trade unwinding could boost Chinese stocks. Identifying undervalued stocks, like those in tech and biotech, offers growth potential. Hong Kong stocks fluctuate due to casino and property sectors; Asian markets rise with PBOC support. Amid a bond market crackdown, analysts warn of long-term yield risks. Record foreign outflows from China signal growing pessimism, driven by economic slowdown and geopolitical tensions.

The press radar on this topic:

Yahoo News
12. August 2024 um 00:04

China's bond market rattled as central bank squares off with bond bulls

Finance
Economy
China's central bank is cracking down on the bond market, but investors remain bullish, citing China's struggling economy and low-risk appetite. However, analysts at Societe Generale and UBS Global Wealth Management caution that expected monetary easing and increased bond issuance could lead to higher yields in the long term, and advise exercising additional caution regarding China's duration risk.
CNBC
12. August 2024 um 01:26

China's bond market is rattled as central bank squares off with bond bulls

Finance
Politics
Economy
Rising volatility shows China's central bank making progress in curbing bond bull market; long-term treasury yield outlook uncertain despite bond bulls' optimism.
Yahoo!
12. August 2024 um 03:41

Chinese Bonds Extend Losses as PBOC Warns About Potential Risks

Politics
Economy
Finance
China's 10-year bond yields rise as PBOC warns of interest-rate risk from bond market rally driven by demand for haven assets and shift from savings to financial investments, with government needing more demand-side support like rate cuts since third plenum to fight deflationary impulses.
Yahoo!
12. August 2024 um 05:31

Chinese Brokers Curb Bond Trading Amid Warnings on Rally

Finance
Economy
Chinese brokerages have curbed domestic government bond trading, including suspending bridge dealing and guidance to rural lenders to halt trading, amid warnings from authorities of a potential market bubble. China's 10-year bond futures and 10-year note yield have risen, and trading volume dropped to 45% of the previous week's high, as investors take heed of the warnings amid economic gloom and rate cut bets.
CW

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