November 3, 2023

Fixed Income Insights (China) – November 2023

Monthly report

China’s 2023 outlook constrained by property woes, but fiscal stimulus resumes

Falling property investments in China drove a downgrade to growth projections, despite a rebound in exports. October’s manufacturing PMI confirmed growth uncertainty. Increased issuance may weigh on sovereign bonds in Q4. Chinese and US dollar HY credit underperformed $ IG, but China sovereigns outperformed G7.

Key highlights:

  • Macroeconomic backdrop − Resilient Chinese growth in Q3, followed by long-anticipated fiscal stimulus in Q4
  • Chinese bonds − Chinese sovereign bond yields increased in shorts and longs, while decreased in mid-terms
  • Chinese and Asian bonds − Asian sovereign spreads vs US dipped further, as US Treasury yields rose sharply
  • Performance − Currency effects drove outperformance by Thai bonds and underperformance by Indonesian bonds

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.

Subscribe to Market Maps reports

Get timely market analysis and commentary on what’s been happening across asset classes, regions, industries and styles.  You’ll receive your report(s) by email as soon as they are published.