China's 10-year bond yield slid below the psychologically-important 2.5% level early on Tuesday, touching 2.47%--its lowest since about 2002. That led to relatively low financing costs and high liquidity, said Zhaopeng Xing, senior China strategist at ANZ Research, with the PBOC recently injecting large amounts of funds into the market. Bond yields move inversely to prices. As investors hope for more monetary policy easing, the question now is when the next cut will take place and how big it will be. What seems clear against the backdrop of policy easing momentum and the continued sluggishness of the property sector is that "the chorus of rate-cut expectations is now louder," Ng said.

Source: Wall Street Journal January 30, 2024 07:56 UTC