More fiscal support is needed, analysts said, after the PBOC surprised markets by announcing plans to cut a number of rates.
"We will need a major fiscal policy support to see higher CNY government bond yields," said Edmund Goh, head of China fixed income at abrdn.
"The most likely path to reflation, in our view, is through fiscal spending on housing, financed by the PBOC's balance sheet," he said, stressing that more fiscal support is needed, in addition to more efforts to bolster the housing market."We will need major fiscal policy support to see higher CNY government bond yields," said Edmund Goh, head of China fixed income at abrdn.
The trend has persisted, with the gap between the U.S. and Chinese yields widening even after the Fed shifted to an easing cycle last week. "If general budget revenue growth does not rebound significantly in the second half of the year, it may be necessary to increase the deficit and issue additional treasury bonds in a timely manner to fill the revenue gap," the CF40 research report said.
He pointed out that monetary easing still requires fiscal stimulus "to achieve the effect of expanding credit and transmitting money to the real economy."
Markets Market Insider U.S. 10 Year Treasury Business News
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
China bonds rally with yields hitting record lows after PBOC signals more easing to boost growthChina bond yields fell to a record low after the People’s Bank of China announced that it will cut the reserve requirement ratio on Tuesday.
Read more »
China will cut reserve requirement ratio by 50 basis points, PBOC chief saysPeople's Bank of China Gov. Pan Gongsheng also said the central bank would cut the 7-day repo rate by 0.2 percentage points.
Read more »
China Bond Yields Hit Record Low After PBOC Cuts Reserve Requirement RatioChinese bond yields plummeted to a new record low on Tuesday following the People's Bank of China's (PBOC) announcement of a cut in the reserve requirement ratio for banks. This move aims to stimulate economic growth amid deflationary pressures.
Read more »
China bond yields hit record low after PBOC signals more easingChina bond yields fell to a record low after the People’s Bank of China announced that it will cut the reserve requirement ratio on Tuesday.
Read more »
PBoC Governor: China will cut reserve requirement ratio by 50 basis pointsPeople’s Bank of China Governor Pan Gongsheng said during a press conference on Tuesday that China will cut the amount of the reserve requirement ratio (RRR) by 50 basis points (bps).
Read more »
China 10-year bond yield hits record low after PBOC signals more easingChina bond yields fell to a record low after the People’s Bank of China announced that it will cut the reserve requirement ratio on Tuesday.
Read more »