China-US yield gap at widest in seven months on GDP momentum

Bloomberg carries an article on the Chinese-US yield differentials this Monday, noting that solid Chinese growth figures pushed the China-US bond yields spread to the widest levels in seven months.

The yield on benchmark 10-year government debt rose four basis points to 3.41% in Shanghai earlier on the day, widening the spread between the US and Chinese securities to 120 basis points, the most since September, according to Bloomberg.

Zhang Guoyu, a Shanghai-based analyst at Tebon Securities Co. noted, “With recent economic data exceeding market expectations, there’s no surprise the bond market will continue to be under pressure. Given the growth momentum, the PBOC is expected to continue a tightening bias and stay away from any loosening measures. That will in turn have a positive impact on cross-border flows and underpin the currency.”