Gov Bond Yields Seen Lower-Herald

Chinese government bond yields may decline further as the country's central bank will still maintain reasonably ample liquidity to offset downward pressure on the economy, while money market interest rates will remain low in the short term, the 21st Century Business Herald wrote, citing analysts. Following the PBOC’s surprise cuts to two major policy rates on Monday, the 10-year Treasury yield extended its fall to around 2.60%, which represented a fresh two-year low. The rate cuts ignited bullish sentiment in the bond market, as traders bet on a longer easing cycle given the current economic downturn and limited financing needs, the newspaper noted.