Mainland Chinese stocks are trying to rebound from five-year lows and it’s starting to look like Beijing is willing to take some action. At least, that’s the view of Clocktower Group’s Chief Strategist Marko Papic. He told me on last week he thinks Chinese stocks could see a short-term rally of 10% or more in coming days, based on a Bloomberg report of Chinese President Xi Jinping potentially meeting with financial regulators. But what Papic is watching in the markets is a move higher in Chinese government bond yields. “One of the best trades for Chinese assets has been to be long bonds, best performing in the world,” Papic said. “My question is, would a recovery in [the] Chinese economy and the stock market be the end to that multi-year rally in Chinese bonds?” he said. “Something to think about for global bond investors. When yields start going up, you will know [it’s a] bottom [in the] economy.” Bond prices fall when yields rise and vice versa. The Chinese 10-year government bond yield has traded around 2.6% versus just over 4% for its U.S. counterpart, according to Wind Information. If Chinese bond yields started to climb, that would likely indicate inv …
Article Attribution | Read More at Article Source
[mwai_chat context=”Let’s have a discussion about this article:nnMainland Chinese stocks are trying to rebound from five-year lows and it’s starting to look like Beijing is willing to take some action. At least, that’s the view of Clocktower Group’s Chief Strategist Marko Papic. He told me on last week he thinks Chinese stocks could see a short-term rally of 10% or more in coming days, based on a Bloomberg report of Chinese President Xi Jinping potentially meeting with financial regulators. But what Papic is watching in the markets is a move higher in Chinese government bond yields. “One of the best trades for Chinese assets has been to be long bonds, best performing in the world,” Papic said. “My question is, would a recovery in [the] Chinese economy and the stock market be the end to that multi-year rally in Chinese bonds?” he said. “Something to think about for global bond investors. When yields start going up, you will know [it’s a] bottom [in the] economy.” Bond prices fall when yields rise and vice versa. The Chinese 10-year government bond yield has traded around 2.6% versus just over 4% for its U.S. counterpart, according to Wind Information. If Chinese bond yields started to climb, that would likely indicate inv …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
