China’s 30-Year Yields Set for Highest Close Since 2024 on Oil

uac)e1c0bsrf7rt4aqik8919_media_dl_1.png BloombergArticle content(Bloomberg) — Yields on China’s 30-year bonds were headed for the highest close since September 2024 as rising oil prices fueled by the war in Iran stoked inflation concern.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentChina’s 30-year bond yields rose three basis points to close to 2.4% while those on 10-year notes edged up one basis point to 1.83% on Monday. Futures on 30-year bonds fell to the lowest level since October 2024.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentA steeper selloff in long-dated debt suggests that rising oil prices may finally counter China’s persistent deflationary pressures. Yields also climbed after industrial production and fixed-asset investment data pointed to an unexpected economic rebound at the start of the year.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Elevated oil prices may add to expectations that China’s reflation efforts could ultimately bear fruit,” said Frances Cheung, head of foreign exchange and rates at Oversea-Chinese Banking Corp. “Domestically, this year’s bond supply remains high. We have a mild steepening bias on the Chinese government bond curve.”Article contentExpectations for higher inflation and growth are curbing demand for sovereign debt as investors swap haven assets for riskier, higher-return securities. Despite waning appetite for safer assets, China has left its debt issuance plan for 2026 steady compared with last year.Article contentThe government is targeting to sell 1.3 trillion yuan ($188 billion) of ultra-long special sovereign bonds with the headline budget deficit unchanged at around 4% of gross domestic product for the year. Market participants say this supply-demand imbalance is hitting long-dated paper hardest.Article contentArticle content“We think the rise in Chinese government bond yields is driven by inflation concerns over higher energy costs, as well as bond supply – especially given banks’ limited appetite for ultra-long bonds,” said Serena Zhou, an economist at Mizuho Securities in Hong Kong.Article contentChina’s consumer price growth accelerated to the quickest in over three years and factory deflation moderated in February. China, the world’s biggest crude oil importer, faces possible inflationary spillovers, though it’s created a cushion by stockpiling crude at onshore sites over the past year.Article contentEnd of Deflation Now Rests More on Strait of Hormuz: China TodayArticle content—With assistance from Wenjin Lv.Article content(Updates with latest economic data in 3rd paragraph and comment in 7th.)Article contentTrending Bank of Canada more likely to cut than hike after 'brutal' jobs report, say economists Economy Canadians’ average wealth hit $1.07 million, but what’s driving net worth depends on your age, province and bracket Wealth Posthaste: Oil supply shock could force the Bank of Canada's hand yet News Trump Demands Help From Other Countries to Secure Hormuz PMN Business This TSX stock has 30% upside on the company's $11 billion project backlog, analyst says Investor Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Bank of Canada more likely to cut than hike after 'brutal' jobs report, say economists Economy Canadians’ average wealth hit $1.07 million, but what’s driving net worth depends on your age, province and bracket Wealth Posthaste: Oil supply shock could force the Bank of Canada's hand yet News Trump Demands Help From Other Countries to Secure Hormuz PMN Business This TSX stock has 30% upside on the company's $11 billion project backlog, analyst says Investor