Fresh Cycle Lows For CGB Yields As PBoC Cements Expectations For Deeper Easing

Chinese benchmark yields extend to fresh session lows as comments from PBoC Governor solidify expectations re: further policy easing.

• He pointed to ample space for policy easing, while highlighting room for a further fall in the RRR.
• Pan also stressed that the PBoC will continue to guide financing costs lower.
• Finally, Pan suggested that policy pivots across DM central banks should give the PBoC additional policy space.
• CGB yields are 2-4bp lower as the curve bull flattens.
• The long end outperforms, reversing some of yesterday’s underperformance (the latter was driven by the announcement re: super-long special Treasury bond issuance).
• 2-, 5-, 10- and 30-Year yield yields hit fresh cycle lows.