China Bond Rally Fades as PBOC Easing Cycle Seen Nearing an End

China signaled Wednesday that more monetary policy stimulus is on the table as it looks to boost lending and support the flagging economy.

(Bloomberg) — China’s bond bulls betting on a boost from imminent monetary stimulus may be disappointed as Beijing could be nearing the end of its easing cycle amid growing concerns about inflation.

Sovereign debt resumed a downtrend Thursday. The yield on the most actively traded 10-year notes rose 4 basis points, or 0.04 of a percentage point, to 2.80%. It fell as low as 2.75% Wednesday when China said monetary tools would be deployed “in a timely and appropriate manner” to maintain reasonably ample liquidity.