SocGen's Stear: China Bond Sell-Off Fears Rise

The video discusses the gap between Producer Price Index (PPI) and Consumer Price Index (CPI) and its implications for the Chinese and global markets. It highlights the potential for rising inflation and its impact on Chinese bonds and corporate profits. The discussion also covers the People's Bank of China's (PBOC) response to economic challenges and the European credit market's outlook, emphasizing the importance of earnings expectations and credit ratings in shaping investment opportunities.

What is the primary concern when PPI rises faster than CPI?

• Improvement in bond yields

• Decrease in export prices

• Pressure on corporate profits

• Increased consumer spending

How might the PBOC respond to a declining credit impulse in China?

• By increasing interest rates

• By recalibrating its tools

• By increasing import tariffs

• By reducing foreign investments

What is expected from the ECB according to the discussion?

• Increase in bond purchasing

• Focus on rhetoric

• Reduction in interest rates

• Significant policy changes

What has been a significant factor in the rise of yields in 2021?

• Decrease in global trade

• Increase in earnings expectations

• Reduction in government spending

• Increase in unemployment rates

Why might European investment-grade credit perform well despite rising rates?

• Because of improving earnings outlook

• Because of lower consumer confidence

• Due to declining inflation

• Due to increased government debt