China’s government bonds are scheduled for their biggest weekly increase since July after Beijing bolstered its liquidity injection two times in three days and global bonds rallied.
- The yield on China’s 10-year sovereign bond fell two basis points to 2.90%, expanding this week’s plunge to seven basis points.
- The move came after PBOC expanded its injection of short-term cash to 100 billion yuan ($16 billion) Friday, following 50 billion yuan early in the week.
- Backing the rally are bets that China’s central Bank will follow global peers in prioritizing stimulating growth over limiting inflation as a slowdown in the nation’s property sector and rising energy costs affects the economy.
- Global bonds increased gains Thursday following a surprise of the markets by the Bank of England deciding to keep interest rates unchanged.
The PBOC usually injects 10 billion yuan of cash at the start of the month before extending it toward month-end to meet the seasonally high demand for funds.
CSI 300 Index down -0.54%, CNY USD down -0.08%