Chinese sovereign bonds sag following higher-than-expected Q1 GDP

The Chinese sovereign bonds sunk on the first trading day of the week after investors moved away from safe-haven assets, following higher-than-expected gross domestic product (GDP) during the first quarter of the year.

The yield on the benchmark 10-year bonds, which moves inversely to its price, jumped 3-1/2 basis points to 3.39 percent, the long-term 30-year bond yield climbed 2 basis points to 3.80 percent and the yield on the short-term 2-year bonds bounced nearly 4 basis points to 3.09 percent by 05:00GMT.

China's economy grew 6.9 percent in the first quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a frenzied housing market that is showing signs of overheating, data released by the National Bureau of Statistics showed Monday. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the first quarter, the same pace as in the fourth quarter of 2016.

The first-quarter growth pace was the fastest since the third quarter of 2015. Further, the data showed that GDP rose 1.3 percent quarter-on-quarter in January-March from the previous three months, compared with growth of 1.7 percent in October-December.

Meanwhile, People's Bank of China set the USD/CNY reference rate at 6.8785, stronger than 6.8740 on Friday. The China's blue-chip CSI300 index fell 0.60 percent to 3,465.63 points and the Shanghai Composite Index slumped 1.11 percent to 3,210.55 points by 05:40GMT, while at 05:00 GMT, the FxWirePro's Hourly CNY Strength Index remained neutral at -73.56 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex