Why Citi is betting on China’s 30-year bonds as US Treasury yields climb
Weak credit demand, policy support and easing supply pressures are expected to sustain demand for ultra-long Chinese debt, analysts say
Citi Research has turned bullish on China’s 30-year government bonds, projecting that yields will fall further even as US Treasury yields climb.
The analysts attributed the outlook to easing supply pressures and improved market dynamics for China’s ultra-long government bonds heading into the fourth quarter.
“China’s recently announced 360-billion-yuan [US$53.7 billion] recapitalisation plan for some major financial institutions may boost duration demand, especially for the ultra-long end,” wrote Rohit Garg, Singapore-based head of EM Asia Rates and FX Strategy at Citi, in the report.
