China Govt Bonds Up; Ignores PBOC Money Withdrawal

        0758 GMT [Dow Jones] China government bonds are higher as liquidity remains ample despite the central bank's net draining of money this week. The five-year government bond yield is down 2 bps at 4.06%, the seven-year government bond yield is down 5 bps at 4.18%. The central bank is set to withdraw a net CNY60 billion from the money market this week, which poses little pressure on liquidity. The seven-day repo rate is at 3.20% vs 3.11% late Wednesday, a comfortable level for investors, since it's quite lower than bond yields. "The bonds have rallied since the start of this month. I'm a little afraid the trend will reverse tomorrow or early next week as the funding rates have limited room to fall," says a Zhejiang-based bank trader. (wynne.wang@dowjones.com)
        (END) Dow Jones Newswires

        May 08, 2014 03:58 ET (07:58 GMT)