CNY rates: Stabilizing onshore and offshore rates
CNH liquidity could ease post holidays.
Group Research - Econs, Samuel Tse4 Oct 2024
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The China market will reopen next week after the week-long National Holiday. Bear steepening remains our core view. Despite some uptick, the short-end 2Y yield will stay anchored amid the commencement of rate cut cycle. Meanwhile, the long-end 10Y yield will see stronger upward pressure due to the RMB2 trillion special sovereign bond issuance. The return of investor confidence in the Chinese economy will also contribute to the upward march. 



For offshore rates, short-end CNH implied yields or CCS rates will likely edge down near-term. Seasonal CNH demand will fade after the holiday. China’s central bank is also less likely to tighten offshore liquidity amid strengthening CNY and CNH exchange rates. That said, stronger CNH demand from asset markets and the real economy will support short-end rates over the medium-term.



Samuel Tse 謝家曦

Economist - China & Hong Kong 經濟學家 - 中國及香港
[email protected]


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