Chinese bonds yields drop as standard & poor’s lowers outlook

Chinese bond prices rose, pushing yields lower after global rating agency S&P cut China’s outlook from stable to negative.

Yield on the benchmark 10-yr Chinese bond dropped almost 2 basis points to 2.886% after S&P revised its outlook from Stable to Negative and said it expects it expects both government and corporate leverage ratios to deteriorate.

Ratings agency also warned about a credit rating downgrade if China attempts to push its GDP above 6.5% via credit expansion.