Bond Yields Went Down and Foreign Investors Continued to Increase Holdings - Chinese Bond Market Analysis for December 2021

In December 2021, international commodity prices increased sharply, the US Consumer Price Index (CPI) increased by 7% year-on-year while the CPI of euro area increased by 5% year-on-year. In China, the CPI increased by 2.3% year-on-year, the Producer Price Index (PPI) increased by 10.3% year-on-year, and the Manufacturing Purchasing Manager’s Index (PMI) was 50.3%. In this month, monetary policy operations achieved a net money withdrawal for the amount of RMB320 billion, and the bond repo rates showed ups and downs. Bond yields went down in general, and the ChinaBond New Composite Index rose slightly. Bond settlements processed at CCDC rose by 23.6% year-on-year, and foreign investors continued to raise their holdings