Foreign Investors Sell Communist China Bonds for Tenth Straight Month

Foreign investors held about $477.5 billion of Communist China bonds by the end of November traded in China’s interbank market, reduced the volume of holdings from nearly $485 billion a month earlier, the central bank’s Shanghai headquarter said on Thursday. It hit a record for offloading holdings in China’s onshore bonds for the 10th straight month although some market watchers expect the heavy outflow pressure will ease soon.

Many market participants believe that the expected recession in the world’s largest economy will force the Federal Reserve to loosen monetary policy next year, even as the U.S. central bank predicts that its interest rates will be higher than previously expected and hold them longer to lower inflation.

JPMorgan said in a report that with further narrowing in U.S.-China government bond yields differential recently, particularly for the long-end, they consider that the bond outflow pressure may have eased further in November.

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