Reported 6 months ago
Macquarie Group Ltd. states that China is learning from Silicon Valley Bank’s collapse in the US while dealing with local bond bulls. The People’s Bank of China is cautioning against bond bulls and specifically warned to start selling sovereign bonds on Friday in an effort to set a floor for long-term yields. Macquarie's economist Larry Hu draws parallels to Silicon Valley Bank's meltdown in 2023, highlighting the risks to China's banking system from changes in interest rates. Chinese sovereign bonds have performed well this year, supported by domestic demand and concerns over weak growth, but Hu warns that assumptions of low rates forever could be overdone, and Beijing may need to increase stimulus to achieve growth targets amidst a global economic slowdown.
Source: YAHOO