Chinese Bonds Near Inflection Point as Inflation Outlook Shifts

Chinese government bond yields appear set to rise from record-low levels as deflationary pressures ease and market expectations for monetary loosening recede. The repricing raises downside risk for existing bond holders and signals tighter financial conditions that could influence capital flows into emerging-market fixed income.

Analysis

Chinese government bond yields appear set to rise from record-low levels as deflationary pressures ease and market expectations for monetary loosening recede. The repricing raises downside risk for existing bond holders and signals tighter financial conditions that could influence capital flows into emerging-market fixed income.