China's bonds are getting cheaper amid hopes that the worst stage of the Covid-19 epidemic is over
The appetite for risk is returning amid hopes that the worst stage of the coronavirus epidemic in China is behind us, with China's main stock index reaching a peak of almost three months.
China's government bonds are losing value. Yields on 10-year sovereign bonds on June 3 reached 2.85%, or a maximum since February, and since early May rose by about 30 bps, which is the worst dynamics among world bonds after Bulgarian securities.
The price fall of China's government bonds may intensify, as traders' hopes for aggressive monetary easing are quickly fading. Investors are afraid that Beijing will refrain from wide-scale easing after the authorities planned a new lending support program. The statement of the People's Bank of China on Tuesday confirmed its commitment to soft monetary policy, but it did not reduce concerns in the debt market.