April 4, 2023

Fixed Income Insights (China) - April 2023

Monthly report

Chinese government bonds underpinned by PBoC need to drive growth

Although Chinese spreads widened versus the G7 in March, as G7 yields fell more, Chinese yields also fell, as the PBoC eased reserve requirements and sought to boost growth. IG credits outperformed HY globally, as investor risk-appetite weakened on US bank woes. Indonesian governments proved best Q1 and 12M performers.

Key highlights:

  • Macroeconomic backdrop − US banking woes reinforce G7 recession risks
  • Chinese bonds − PBoC reserve requirement cut helps government bonds rally, led by longs
  • Chinese and Asian bonds − Asian governments joined the global government bond rally on the flight to quality, HY underperformed
  • Performance − Indonesian and Australian governments were strongest performers in Q1

This report provides actionable insights on currency-adjusted performance, macro drivers, shifts in yields, spreads and curves across conventional government and corporate bonds, for both renminbi and dollar-denominated issues.

For specialist content on a range of investment topics, including macroeconomic analysis and how it affects market performance and multi-asset analysis, viewed through our indices and data, explore our Global Investment Research hub.

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