China bonds caught up in risk-on surge 

Reports of Chinese stimulus and optimism for a Biden presidency draw investors into higher-yielding debt  

China bonds caught up in risk-on surge 
Unemployed Chinese men pitch for work on a Guangzhou pavement. Reports suggest China will inject more stimulus to boost the economy.

(ATF) Chinese corporate and municipal bonds climbed for a fourth consecutive day after reports said the government was ready to step up measures to boost the economy.

The higher-yielding fixed-income securities were also boosted by rising risk appetite among global investors as forecasts indicating Donald Trump will lose today’s US presidential election raised hopes of new stimulus in the world’s largest economy.

The benchmark ATF China Bond 50 Index rose 0.03% for a second day. Of the Allindex sub-indexes, Corporates advanced 0.02%, Enterprises increased 0.03%, Financials added 0.01% and Local Governments were 0.01% higher.

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Of the bonds that traded today, the yield on Bank of Beijing’s 3.10% bond lost 0.03%.

Corporate bonds benefited from risk-on sentiment that lifted stocks worldwide. US voters went to the polls at the end of a bruising campaign. Investors were nevertheless cautious amid concern Trump will refuse ro go graciously if, as predicted by the polls, he loses to challenger Joe Biden.

The Democrat is seen as a unifying force and pro-globalisation candidate and with a sweep of the Senate and House of Republicans being predicted by some pollsters, would be expected to introduce a new round of pandemic-relief.

Chinese bonds also rose following a Xinhua report that China will step up counter-cyclical adjustments to the macro economy.

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