More on China's Cabinet talking about RRR cuts - Chinese bond yields sliding

Earlier post on this here: China's State Council promises increased support for the real economy, flags potential for RRR cuts at an appropriate time

(and ps Justin had this as it hit: China says that timely use of RRR cuts will support real economy ICYMI)

More:

• More on potential China RRR cut - in September says the Securites Journal

These sorts of rumours/chatter of RRR cuts do come around quite often and mostly pass by without any action. However, there is a response in bonds, yields on China bonds are lower. I noted yesterday the gap with US bonds widened:

• The yield differential between Chinese and US bonds has widened to a 4 month high

Not so much now though. It looks to me that maybe there was some discomfort in China with that gap and how it might send the yuan appreicating again. The PBOC intervened in the back half of June to weaken the yuan (says ANZ here):

• PBOC yuan intervention, US$23bn amount