(Yicai Global) Nov. 22 -- 10-Year Treasury bond yields have hit four percent once again yesterday, after reaching the same level on Nov. 14. In the morning session of Nov. 22, the yield to maturity (YTM) in optimal purchasing prices of 10-year Treasury active bond 170018 registered 4 percent, while Treasury bond futures prices decreased, reported Shanghai Securities News.
Previously, the bond yield continuously fell back to 3.93 percent from 3.97 percent at the close on Nov. 14, while futures rebounded from below 92 points in the middle session.
The central bank, the People's Bank of China, jointly issued a policy-draft titled Guiding Opinions on Standardizing the Asset Management Business of Financial Institutions with other departments on Nov. 17, to bring in new regulations on capital worth nearly CNY100 trillion concerning various agencies including banks, trusts, securities, funds, futures and insurance.
The bond market remains pessimistic under the strict regulation, At the beginning of this week, the bond yield returned to an upward trend. The China Bond Yield Curve showed that the 10-year Treasury bond yield has risen to 3.95 percent on Nov. 21, up by three base points overall this week.
Negative factors loom ahead in the market while the new regulation is implemented, said a spokesperson for a research team from Shenwan Hongyuan. Coupled with the net capital injection in small amounts from PBOC and a tightly balanced liquidity, prospects for the bond market remain grim.
Even if there is more stable or improved liquidity going forward, asset management agencies will not be allowed to increase their leveraging efforts at random. Therefore, the liquidity is expected to mainly recover the fundamentals.