China’s treasury market rattled as central bank squares off with bulls

Chinese government bonds fell sharply on Monday following a turbulent week in which the central bank started intervening heavily to stem a plunge in long-dated yields even as the economy is struggling.

China’s 10-year treasury futures dropped 0.6% in their worst day in 17 months, while the bond yields, which move inversely to prices, jumped roughly 4 basis points.

But die-hard investors say the bull market in government bonds still has legs, citing China’s wobbly economy, deflationary pressures and low investor appetite for riskier assets.

Source: REUTER