China: Far more pronounced spike in government bond yields - Rabobank

Michael Every, Head of Financial Markets Research at Rabobank, notes that yesterday saw a far more pronounced spike in Chinese government bond yields after suggestions that the PBoC might look to inject liquidity directly into the financial system as needed rather than cutting either the base borrowing rate or banks’ reserve requirement ratios further.

Key Quotes

“China has rather dropped off the market radar of late, and we can expect nothing but blue skies and sunshine, metaphorically, ahead of the upcoming G-20 summit there. Afterwards, however, the same issues of structural economic slowdown, massive over-capacity, and a dangerously spiralling debt load will be back with a bang.”