China's Central Bank Intervenes in Bond Market to Stabilize Exchange Rate and Economic Expectations

Beijing, Beijing Municipality China
Beijing is studying shifting to a short-term rate as its new policy tool, making the existing one-year benchmark rate endangered.
China's central bank, the People's Bank of China (PBOC), is intervening in the bond market to calm volatility and stabilize exchange rate and economic expectations.
Financial institutions are buying Chinese government bonds, indicating expectations of lower interest rates in the future and increasing pressure for capital outflows.
PBOC announced plans to conduct bond repurchase operations, narrowing volatility around the seven-day repurchase rate and strengthening expectations for it to become the new policy.
PBOC has expressed concerns about bond market volatility and introduced plans to sell treasury bonds to cool a bond rally.
PBOC has reportedly hundreds of billions of yuan in securities to sell to calm the market.
Traders have set red lines for 10- and 30-year yields at 2.25% and 2.45% respectively, expecting PBOC intervention if breached.
China's Central Bank Intervenes in Bond Market to Stabilize Exchange Rate and Economic Expectations

China's central bank, the People's Bank of China (PBOC), is taking steps to calm the bond market as traders have set red lines for 10- and 30-year yields at 2.25% and 2.45% respectively, expecting the PBOC to intervene if those levels are breached. The central bank has reportedly hundreds of billions of yuan in securities to sell.

Meanwhile, Beijing is studying shifting to a short-term rate as its new policy tool, making the existing one-year benchmark rate endangered. The PBOC announced plans to conduct bond repurchase operations in the afternoon, narrowing volatility around the seven-day repurchase rate and strengthening expectations for it to become the new policy.

Financial institutions are buying Chinese government bonds, which some experts believe indicates expectations of lower interest rates in the future. This behavior can be seen as shorting the Chinese economy and increasing pressure for capital outflows. The PBOC has expressed concerns about the bond market and introduced plans to sell treasury bonds to cool a bond rally.

The central bank's goal is to stabilize exchange rate and economic expectations.


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Confidence

91%

Doubts
  • Is the PBOC's intervention enough to stabilize the bond market long-term?
  • What is the true extent of financial institutions' expectations for lower interest rates?

Sources

93%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Institutions snapping up Chinese treasury bonds are shorting the economy, state media says

Yahoo Finance Unknown Reuters Saturday, 13 July 2024 16:03
  • Unique Points
    • China's central bank-backed Financial News reported that financial institutions are buying Chinese government bonds,
    • Industustry sources and experts believe this behavior indicates expectations of lower interest rates in the future,
    • This action can be seen as shorting the Chinese economy and increasing pressure for capital outflows,
    • The People’s Bank of China (PBOC) has expressed concerns about the bond market and introduced plans to sell treasury bonds to cool a bond rally,
    • The central bank’s goal is to stabilize exchange rate and economic expectations.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (70%)
    The article reports on the views of industry sources and experts that financial institutions buying Chinese government bonds are 'shorting' the Chinese economy. This is an editorializing statement by Reuters, as it implies a negative interpretation of these institutions' actions without providing any evidence to support this claim. The article also states that these institutions are 'basically shorting China’s yuan and the Chinese economy,' which is a further exaggeration and manipulation of the situation.
    • Financial institutions snapping up Chinese government bonds are basically shorting the Chinese economy,
  • Fallacies (95%)
    The article reports on the views of industry sources and experts that financial institutions buying Chinese government bonds are 'shorting' the economy. This is an informal fallacy known as a false cause or hasty generalization fallacy. The author is implying that these institutions' actions will lead to negative consequences for the economy without providing sufficient evidence to support this claim.
    • ][Financial institutions] frantically snapping up government bonds equals to expecting that interest rates will get lower and lower in the future.[/]
    • [They are basically shorting China’s yuan and the Chinese economy, increasing the pressure for capital outflows.]
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

97%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

China Bond Traders Draw Red Lines as PBOC Gears Up to Calm Rally

Bloomberg News Now Saturday, 13 July 2024 16:09
  • Unique Points
    • China's central bank, the People’s Bank of China (PBOC), has ‘hundreds of billions’ of yuan in securities to sell.
    • Bond traders have set two red lines for 10-and 30-year yields at 2.25% and 2.45% respectively.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication

94%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

China’s Benchmark Rate Becomes Endangered Species in Central Bank Shift

Forex Factory Saturday, 13 July 2024 16:10
  • Unique Points
    • China's central bank is studying shifting to a short-term rate to guide markets, making the existing one-year benchmark rate endangered.
    • Beijing will start conducting bond repurchase operations in the afternoon, narrowing volatility around the seven-day repurchase rate and strengthening expectations for it to become the new policy.
  • Accuracy
    • ]China's central bank is studying shifting to a short-term rate to guide markets, making the existing one-year benchmark rate endangered.[
    • Industry sources and experts believe this behavior indicates expectations of lower interest rates in the future,
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication