CHB - Will Chinese Government Bonds Remain A Safe Haven?

• Favorable factors such as relatively higher yields vs G7 government bonds and a defensive currency, have helped Chinese government bonds outperform in 2021.
• Chinese government yield spreads vs other major bond markets fell sharply in 2021, particularly so, in Q1 2021, when G7 yield curves steepened in the reflation trade, while the PBoC stayed firmly on hold through the year.
• Investors of renminbi-denominated bonds are exposed to currency risks, if based in other currencies, and currency hedging costs vary according to the home currency of investors.

For further details see: