Bond prices on China's interbank bond market are likely to rise Wednesday amid lower funding costs. Traders noted that capital prices in the money market continued to edge down on Tuesday after the central bank added cash to the financial system via its open market operations.
The People's Bank of China, China's central bank, conducted 50 billion yuan of 7-day reverse repos in Tuesday's open market operations. As 35 billion yuan worth of reverse repos are due on Tuesday, the central bank injected a net 15 billion into the financial system in a single day.
At the same time, the central bank announced recently that it would auction 50 billion yuan worth of 3-month treasury cash deposits on July 30. On Tuesday, ChinaBond New Composite Total Return Index, a broadly-based market sentiment indicator, added 0.0719 percent to 163.5437 points.
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