(March 14): Chinese markets have been notably unperturbed by the global convulsions sparked by the fallout from a sudden rush of US banking failures. The biggest drop in two-year Treasury yields since the early 1980s hasn’t had much impact on their Chinese equivalents, which have barely moved. Onshore credit spreads haven’t budged since last Friday (March 10), while mainland Chinese stocks rallied on Monday on signs that monetary policy will largely be stable this year. Yuan assets are likely to be shielded from the market tumult fuelled by concerns of US systemic banking risks as investors cement bets on China’s economic recovery. That would result in a narrowing rate differential with China, and boost the appeal of yuan assets.

Source: The Edge Markets March 14, 2023 20:33 UTC