PBOC Salvo on Bond Rally to Have Little Impact, Analysts Say
- Ten-year yield may fall to record low by year-end: Natixis
- Shortage of investable assets makes move less persistent: SEB
The People's Bank of China (PBOC) building in Beijing.
Source: Bloomberg
This article is for subscribers only.
China watchers expressed some skepticism about the central bank’s ability to influence downward pressure on yields, despite it readying a pool of hundreds of billions of yuan of bonds to sell to cool a rally.
While yields may edge higher in the short-term, the fundamentals driving investors to bonds are unlikely to change, according to analysts and strategists. The People’s Bank of China’s move is likely aimed at targeting the shape of the yield curve and for risk management purposes, they said.