Free Trial

(M2) Correction Extends


Late Session Rebound


(M2) Corrective Cycle Remains In Play


(M2) Gains Still Considered Corrective

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Bank of America note that "after a sharp rally in July, the 10-Year CGB has been consolidating in the 2.8-2.9% range over the past month. One potential trigger that can lead yields to new YtD lows would be more forceful monetary easing. Our economists believe another month of disappointing macro data will likely prompt the central bank to lower the 1-Year LPR by 10bp in Sep, followed by another 15bp cut in Q421. In sharp contrast, market consensus does not see any changes in policy rates by year-end. We think the possibility of policy rate cuts is underappreciated by the market, and recommend positioning for any surprising easing moves via a long 3-Year CGB position. The MLF operation on 15 Sep and LPR releases on 20 Sep shall be watched closely as window of opportunities for policy rates adjustments."

  • "On the back of rapid slowdown in growth momentum and a stronger need for monetary easing, we mark-to-market our Q3 forecasts and revise down 10-Year CGB year-end forecast to 2.75% from 3.20%. A further decline in credit growth and faster-than-expected slowdown in export growth pose major downside risks to our revised forecasts. On the other hand, sustained high issuance of government bonds into Q4 may eventually start challenging market demand, exerting upward pressure on yield. Regulatory headlines on banks' wealth management products (WMP) also need to be watched closely in the final months of the grace period - direct impacts on rates bonds are likely to be limited, but selling activities may occur when WMPs face redemption pressures."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.