18 Jul Rising mid- and long-term interest rates in China cannot continue forever

Over the past week, the 7-day interest rates dropped to 2.2%, as low as the rate at beginning of this year; while the 10-year yield curve rates rose to 3.2%, hitting a new high for 2019. Rising risk-free rates reflect the change of market expectation and investor demand.

First, macroeconomic expectations lifted based on the positive effect from the credit recovery to economic growth. Secondly, inflationary expectations are rising. Finally, capital flowing from the bond market to other equity markets strengthened the yield curve.

中长期市场利率上行难持续

过去一周，货币市场的7天利率跌破2.2%，重回年初低位;但债券市场利率10年期国债收益率升破3.2%，创出今年新高。无风险债券利率上行应是市场预期变化及投资者行为变化共振的结果。

首先，经济预期出现修正，信用恢复扩张对经济增长的支撑作用逐渐显现。其次，通胀预期有所抬头。最后，债券利率大幅上行还与投资者资金逐渐从债券流向股票等其他资产有关。

Sources – https://finance.sina.com.cn/roll/2019-04-08/doc-ihvhiqax0724549.shtml

http://epaper.cs.com.cn/zgzqb/html/2019-04/08/nw.D110000zgzqb_20190408_4-A01.htm