Futures on 30-year sovereign notes fell as much as 0.7 per cent on Thursday, extending this week’s drop to 1.5 per cent at the low
A sell-off in China’s bond market is accelerating, sending futures on ultra-long debt to a four-month low as a bull run in local stocks builds momentum.
Futures on 30-year sovereign notes fell as much as 0.7 per cent on Thursday, extending this week’s drop to 1.5 per cent at the low as a gauge of onshore equities reached its highest point since October. The moves are less dramatic in the cash bond market, with yields on the same maturity government paper up one basis point.
The world’s second-largest bond market has come under increased pressure in the past month, thanks to easing US-China trade tensions and optimism that efforts to curb overcapacity and excessive price wars will pull the economy out of deflation. Dwindling expectations for further monetary easing in the short term, as well as the imposition of a tax on certain bond investments, have also soured investor sentiment.
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