MARKET TALK: China Govt Bonds End Up As Liquidity Conditions Ease

China onshore IRS are higher as the PBOC's weekend announcement of a 50-bp reserve ratio cut fails to significantly ease interbank liquidity. The one-year IRS is 2 bps higher at 3.27%-3.37% and the five-year is also 2 bps higher at 3.37%-3.47%. The benchmark seven-day repo rate is off 14 bps at 5.24%. "Investors are cautious before the RRR cut takes effect on Friday. They will be very disappointed if the liquidity conditions don't ease after then," says a Shanghai-based local bank trader.