The Tell: Renewed Chinese appetite for Treasurys might not keep a lid on yields

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The bond bears have plenty of problems to contend with, including tepid inflation data, an economy that may be in the last innings of the business cycle, and low global interest rates, to name a few.

This week, traders appeared to add one more to that list—renewed Chinese purchases of Treasurys.

After a Bloomberg News article on Tuesday reported Chinese officials were contemplating its return to the market for U.S. government paper, the benchmark 10-year Treasury yield slipped 3.5 basis points to 2.147%, its lowest level since November. Analysts said the move was sparked in part by fears that a large buyer like China could keep a lid on rates.

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