China's interest rates are unlikely to rise sharply in the short term despite the recent upsurge in the US Treasury yields, Reuters reports, citing a commentary in the state-run China Securities Journal.
Key points
“Further rises in the market rates in China were contained as two key policy rates - interest rates in open market operations and medium-term lending facility (MLF) - were stable with no signs of them being pushed up in the short term.”
"Macro situations at both home and abroad have been generally improving, and (we should) pay close attention to price trends.”
"Meanwhile, government bond issuance may accelerate in the second quarter, causing increasing supply pressure, so the upward trend of market interest rates has not yet ended."
Market implications
USD/CNY is off the lows on the above reports, now trading modestly flat at 6.4698. The US dollar’s steady recovery also aids the renewed uptick in the spot.
At the press time, the benchmark 10-year US Treasury yields gain 0.73% to hover around 1.48%. The yields have resumed their advances amid ongoing reflation theme.
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