April 08, 2024

Fixed Income Insights (China) – April 2024

monthly report

China seeks growth quality upgrade after persistent property weaknes

China expands fiscal support in 2024 by issuing special government bonds, in addition to monetary policy stimulus. Chinese bond yields fell further in Q1 on monetary easing, but wide rate differentials drove sovereign spreads lower and a weaker yuan. Indian government bonds outperformed, helped by a resilient rupee.

Key highlights:

  • Macroeconomic backdrop − China aims to transform to high-quality development, with expansionary fiscal policy support
  • Chinese bonds − Chinese sovereign yields fell across the curve in Q1, as onshore spreads narrowed
  • Chinese and Asian bonds − Asian yield moves were mixed; Chinese spreads versus G7 fell back in Q1
  • Performance − Indian bonds outperformed in Q1, while JGBs lagged on a weaker yen and monetary tightening

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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