China Bonds Turn Bearish as RRR Cut Expectation Cools: Herald

The Chinese bond market turned more bearish after the PBOC last week failed to signal further easing, and that an RRR cut this year seemed less likely, the 21st Century Business Herald reported citing analysts. The PBOC said it would use MLFs and open market operations to maintain ample liquidity and will promote the launch of carbon reduction support tools, which the market expects to be some re-lending tools that exceed CNY1 trillion, the newspaper said. Though Q3 GDP unexpectedly fell below 5%, the bearish sentiment in the bond market remains unchanged as structural tools like relending aiming to boost credit may be the main measure to support the economy in the near term, instead of monetary easing, the newspaper said citing an anonymous trader at a state-owned bank in Shanghai.