ridethepig

ridethepig | Chinese Yields Struggling

Short
TVC:CN10Y   China Government Bonds 10 YR Yield
πŸ“Œ A Pullback for Chinese Yields

This illustrates the notion of development in a change in trend for China's sovereign bond market. Sellers avoided a breakout and are aiming to test 3.00%.

On the fundamental side, China is outperforming as expectations are skewed towards favouring their management of the virus and recognisable weakness of the West!


Strong LT push factors remain in play, putting the renminbi into SDR was a game-changer, as with the Saudi's allowing issuing Oil in CNY contracts; 2020 was the year of the Yuan while 2021 looks more like a game of two halves. H1 2021 we have another deflation storm cooking while H2 2021 rate markets are showing early hints of inflation and rate hikes.


On the technical side, sellers now have the attacking position in the highs. This is a definite advantage. Here the weakness comes from a breach of our diagonal resistance (light blue). With this move, sellers see themselves as obliged to continue by playing an initial test of 3.00% which will unlock a sweep of July 2020 lows at 2.83%.


Thanks as usual for keeping the support coming πŸ‘ or πŸ‘Ž

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