China To Sell Total CNY 129bn Bonds Today

China is to sell a total CNY 129bn of upsized 2-year and 5-year bonds (CNY 64bln 2-year, CNY 65bln 5-year). Results due around 0235GMT/1035HKT.

• China's last sold 2-year upsized bonds on Dec 23 at an average yield of 2.7183%, with the highest at 2.7607%. Bid/cover ratio was 5.4, and the marginal cover at the highest yield was 2.05
• China last sold 5-year upsized bonds on Dec 9 at an average yield of 3.0713%, with the highest at 3.0919%. Bid/cover ratio was 3.18, and the marginal cover at the highest yield was 2.01
• Yesterday yields fell across the China sovereign yield curve fell, with 1-year bonds moving the most afternoon trading as domestic equity indices caught a bid.
• The 1-year yield fell 14bps to 2.19%
• The 10-year yield fell 2.3bps to 3.158%
• The 30-year yield fell 5bps to 3.785%
• The 1-year-10-year yield spread widened 11bps to 96.8bps on bear steepening.
• China should establish an integrated infrastructure for its fragmented bond markets by unifying depository and settlement services in a bid to improve efficiency, according to the head of the PBOC's finance research institute Zhou Chengjun. He says the move would improve risk control and help the transmission of monetary and fiscal policy.