China Seeks Targeted Tightening; Yield Curve to Steepen: SocGen
Source: BFW (Bloomberg First Word)
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Frances Cheung (Societe Generale SA)
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(Bloomberg) -- China may see targeted tightening in overheated sectors though broad-based tightening isn’t likely as economic growth isn’t very strong, Societe Generale Asia ex-Japan head of rates strategy Frances Cheung says.
Alert: HALISTER1- PBOC to keep liquidity supported
- Near-term yield curve lacks steepening momentum, because soft economic outlook prevents mid to long end rates from rising too rapidly
- Directionality has not been very strong in CNY rates market
- Even when rates rise, the curve does not tend to steepen a lot
- Expects CNY IRS curve to steepen on a 6-12 month horizon
- Local govt bonds supply likely to continue concentrating on 5-year and beyond, may add price pressure to long-end
- Upcoming external rate hike would indirectly transmit to China bonds as well, which will lift long-end yields
Source: BFW (Bloomberg First Word)
People
Frances Cheung (Societe Generale SA)
To de-activate this alert, click here
UUID: 7947283