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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China LT bond yield has been trending lower in the past week even though inflationary pressures continue to remain elevated.
- The 10Y yield broke below its 2.80% key support last week, which represents the 61.8% Fibo retracement of the 2.46% - 3.36% range.
- One major explanation for the compressed term structure has been the rise in Covid uncertainty with the discovery of new variant ‘Omicron’.
- As China maintains a ‘zero-Covid’ policy, the discovery of a new variant could result in renewed restrictions/local lockdowns imposed by the governments and therefore lowers growth expectations.
- Interestingly, the market does not seem to be ‘convinced’ by the recent easing measures announced by China officials, and therefore the elevated uncertainty continues to push preference for ‘risk-off’ assets such as government bonds.
- Hence, investors have started to question for how long China will be able to keep up its zero-Covid strategy.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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