The Chinese sovereign bonds were pushed lower across the curve on Thursday after Organization of the Petroleum Exporting Countries (OPEC) agreed to their first production cut in eight years at Vienna.
Also, the Chinese 10-year bond yields approached to break the 3 percent mark for the first time since June this year.
The yield on the benchmark 10-year bonds, which moves inversely to its price, rose 9 basis points to 2.99 percent, the long-term 30-year bond yield climbed 4-1/2 basis points to 3.34 percent and the yield on the short-term 2-year bonds bounced 14 basis points to 2.61 percent.
The China’s official manufacturing PMI rose to 51.7 in November, from previous 51.2 reading in October. The rebound in the headline index was driven by a rise in new orders and fall in inventory. Also, non-manufacturing PMI bounced to 54.7 in November, from prior 54.0.
Moreover, crude oil prices rallied after OPEC agreed to output cuts in OPEC ministerial gathering at Vienna yesterday. The International benchmark Brent futures rose 1.10 percent to $52.41 and West Texas Intermediate (WTI) jumped 1.05 percent to $49.96 by 05:30 GMT.
The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by roughly 1.2 Mb/d to 32.5, which equates to a 4.5-4.6 percent cut per member country. We believe the outcome is consistent with our view of what OPEC production levels were expected to be in 2017 irrespective of the deal reached yesterday, reported Barclays in its research note.
In other words, the meeting is highly unlikely to substantially affect the oil market balance. Compared with our assessment of OPEC supply last month, we have adjusted our first-quarter of 2017 production estimate lower by 350 kb/d, which will result in a slightly steeper draw than our balances were forecasting, they added.
Meanwhile, People's Bank of China sets the USD/CNY reference rate at 6.8958, weaker than yesterday’s 6.8865. The China's blue-chip CSI300 index rose 0.54 percent to 3,556.99 points and the Shanghai Composite Index jumped 0.44 percent to 3,264.45 points.
