Since the beginning of this year, driven by the aggressive interest rate hike attitude of the Federal Reserve, the yield of US bonds has risen rapidly, and the yield curve of China and the United States has "double upside down": first, the yield curve of US bonds has been partially upside down, and the interest rate spread of some terms has turned negative; Second, the yield curve between the two countries showed a wide range of upside down, and the US debt interest margin turned negative rapidly in the 2-10-year period (Figure 1). In this context, in March, the net outflow of foreign capital under the land stock connect was 46.1 billion yuan, and the custody data showed that foreign capital sold 112.5 billion yuan of Chinese bonds. In April, the devaluation of the RMB against the US dollar and the gradual approach of the exchange rate of the Hong Kong dollar against the US dollar to the weak side's guarantee position all indicate that China has a certain scale of capital outflow.
From the perspective of 10-year Treasury bonds, as of April 20, the yield of US Treasury bonds rose by 121bp to 2.93% from the beginning of March, while the yield of Chinese treasury bonds fluctuated slightly by 2bp to 2.82% during this period. It can be seen that the two countries are more on the defensive driven by the aggressive monetary policy of the United States.
