The yield on the benchmark China 10-year government bond sank further towards 2.85%, the lowest since September 6th and continues to approach levels not seen since June of last year, amid reports of huge liquidity injections by the People’s Bank of China (PBOC) and growing concerns about the economic recovery. The central bank has been injecting tranches of CNY 100 billion worth of reverse repos into the economy, aiming to keep liquidity loose in an effort to help boost the recovery despite inflationary pressures. At the same time, Premier Li Keqiang said that the economy was facing increasing headwinds and has urged local governments to support small businesses amid warnings from several government advisers that the economic recovery is not yet stable and growth in the final quarter might miss the key threshold of 4%. The nation has been battling its biggest delta variant outbreak yet, while sticking to the “Zero Covid Policy”.
Historically, the China Government Bond 10Y reached an all time high of 4.80 in September of 2007. China Government Bond 10Y - data, forecasts, historical chart - was last updated on November of 2021.
The China Government Bond 10Y is expected to trade at 2.89 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 2.97 in 12 months time.