Bank Of America: Too Early To Withdraw Monetary Easing Hopes

Bank of America note that "despite further weakening in economic and credit data over the past two months, China rates have lost momentum since August and even witnessed a sharp rebound in October. The recent re-pricing of monetary easing expectation doesn't seem justified to us, and the market's rising optimism on the credit growth outlook is a bit premature. We maintain our 10-Year CGB year-end forecast at 2.75%, but in the very near-term, the measure is likely to consolidate around the current level or may even see moderate upward pressure from further positioning unwinding. Government bond supply is expected to be heavy in the coming weeks, but pre-emptive liquidity facilitation from the PBoC should help mitigate pressure on bond yields."