China Bond Yields Edge Down as Deflation Sets Them Apart From Global Debt Surge
Updated
Updated · CNBC · Aug 20
China Bond Yields Edge Down as Deflation Sets Them Apart From Global Debt Surge
3 articles · Updated · CNBC · Aug 20
Summary
Chinese government bond yields have slipped in recent months even as benchmark yields in the U.S., Japan and the U.K. climbed to multi-decade highs, strengthening their appeal as a portfolio diversifier.
July's weak retail sales and industrial production data reinforced expectations for more rate cuts and stimulus, keeping the People's Bank of China on an accommodative path.
Strategists at Invesco, UBS and Saxo said that policy backdrop leaves Chinese government bonds offering positive real yields and defensive characteristics despite soft domestic demand.
China's severe property downturn and deflation contrast with inflation pressures driving tightening in Europe and Japan, making its rate cycle increasingly distinct from other major markets.