Rout of China’s Bonds Worsens Amid Concerns on Surge in Issuance
- Ten-year sovereign yield jumps to its highest since March
- Reaching 2.8% would be good entry point for investors: analyst
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A sell-off in China’s sovereign notes worsened Monday, with the benchmark 10-year yield surging to its highest level since March, amid concerns that investors may switch to local-government bonds for better returns.
The yield on sovereign notes due in a decade jumped as much as seven basis points to 2.68%. Sales this month of local government bonds are expected to climb to a record high of more than $141 billion. The supply has raised concerns that commercial banks, the largest holders of sovereign notes, may shift some funds to debt sold by regional authorities for their higher returns.