CGB steepener trade gains traction amid PBoC actions
Stimulus measures and warnings on long-dated yields have seen basis more than double since March
While US traders have been unwinding their interest rate steepener positions due to stronger-than-expected economic data in early October, dealers have seen the Chinese versions of the trade continue to thrive.
The China government bond (CGB) steepener trades sees foreign investors short long-dated bonds, especially the 30-year tenor, and buy at the shorter end on the expectation that the yield curve will continue to steepen.
A combination of recent stimulus measures and warnings from the country
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