HALISTER1: CORRECT: China Bonds Favored as Data Hint at Weaker Outlook: ANZ

CORRECT: China Bonds Favored as Data Hint at Weaker Outlook: ANZ

(Bloomberg) -- (Corrects second bullet to clarify cuts to interest rate and RRR unlikely in very near term) China economic data set to weaken further in 2H on industrial capacity cuts, favoring sovereign bond market, says David Qu, Shanghai-based markets economist at ANZ Bank China.
  • Weaker growth outlook and rise in corporate credit risks encourage flows to safe havens
  • Policy makers are unlikely to cut interest rates or RRR in very near term; PBOC says such stimulus is negative to yuan
  • ANZ forecasts full-year GDP growth of 6.5%
  • NOTE: July industrial output +6.0% y/y vs est. +6.2%; retail sales +10.2% vs est. +10.5%; fixed-asset investment +8.1% vs +8.9% est.
  • Yield on 2.74% govt bond due Aug. 2026 rises 2 bps to 2.710%
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Source: BFW (Bloomberg First Word)

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