SHANGHAI (Reuters) – Chinese language market rates of interest are unlikely to rise shortly within the close to time period regardless of the latest sharp rise in US bond yields, the China Securities Journal mentioned on Thursday.
Chinese language bonds have been “desensitized” to their US counterpart because the financial cycles of the world’s two largest economies diverged, in keeping with a remark in state media, including that home charges have additionally already factored in l affect of macroeconomic coverage adjustments.
The newspaper mentioned additional market fee hikes in China have been contained as two coverage charges – the rates of interest on open market operations and the Medium-Time period Lending Facility (MLF) – have been secure with no indicators of rising within the brief time period. .
Expectations for inflation and the economic system as a complete have been secure whereas provide and demand within the bond market have been balanced within the first quarter of this yr, he added.
“Macroeconomic conditions each at residence and overseas have usually improved and (we should always) pay shut consideration to cost traits,” the newspaper mentioned.
“In the meantime, authorities bond issuance might speed up within the second quarter, resulting in rising stress on provide, in order that the upward development in market rates of interest will not be but completed. “
The yield on benchmark 10-year US Treasury bonds has risen by round 60 foundation factors to date this yr, in comparison with a 10-basis level improve for Chinese language 10-year authorities bonds within the final yr. identical interval, leading to decrease yield. premium.
Earlier this week, Guo Shuqing, head of China‘s Banking and Insurance coverage Regulatory Fee, mentioned China was exploring methods to handle capital inflows to keep away from home market turmoil, with authorities “very involved. »By the danger of bubbles bursting in overseas markets. .
Reporting by Winni Zhou and Andrew Galbraith; Edited by Shri Navaratnam