2012.05.10 05:57:05 MARKET TALK: China Govt Bonds Up As Inflation Concerns Ease

0357 GMT [Dow Jones] China government bonds are largely higher midday on easing concerns about inflation and improved liquidity conditions; also, the latest trade data show import growth remain sluggish, a negative sign for domestic demand, which may lead to more pro-growth measures from Beijing that could benefit the bond market. The Shanghai Stock Exchange government bond index is at 132.93 vs 132.92. Yields on one-year Treasurys fall by 0.84 basis points to 2.8578% on average; yields on seven-year government bonds fall by 0.25 basis points to 3.4330% on average. "Improved liquidity conditions, coupled with the news of the oil prices cut, are driving bond prices higher," says a Nanjing-based trader at a local bank; "given a bleak outlook for the world's economy and China's weak import growth, investors will likely shift part of their money into the safe-heaven bond market," she adds. (rose.yu@dowjones.com) Contact us in Singapore. 65 64154 140; MarketTalk@dowjones.com (END) Dow Jones Newswires May 09, 2012 23:57 ET (03:57 GMT)