Resilient Performance From China Government Bonds As Global Sell-Off Continues

Asian Government bonds are dealing mixed, despite global bonds remaining under pressure amid ongoing repricing of the central bank policy trajectories.

• Federal Reserve Chair Powell's remark about the "lack of significant progress on inflation" contributed to the overnight weakness in US tsys, which reached new YTD yield highs.
• In contrast, the China Government Bond Curve has slightly twist-flattened, pivoting at the 5s, with yields 0.7bp higher to 1.1bps lower.
• The varied commentary from sell-side analysts following yesterday’s Q1 GDP growth data release offers insight into the resilience of the Chinese bond market today.
• While some analysts have become more cautious regarding the possibility of further easing in China's monetary policy, there is consensus that tightening measures are not currently being considered. On the other hand, institutions like Nomura and Goldman Sachs anticipate additional policy support, pointing to mixed March activity data released yesterday as justification for their stance.
• Many of China’s mutual fund companies have set purchase limits on their products focused on short to mid-term bonds as demand for such instruments has surged: Shanghai Securities News.
• The South Korean Sovereign are dealing mixed, with yields 3bps lower (1-year) to 2bps higher (20-year). This comes as BoK Governor Rhee, in a CNBC interview, expressed concern over the recent excessive movements in the KRW and underscored the readiness of authorities to implement stabilisation measures.