Ethan's Economics and Finance Views

 FTSE Confirmed to Include China Government Bonds to its WGBI Index New Sharing In early September last year, FTSE was planned the decision to include some China Sovereign Bonds to its flagship index so that more global investors can enter the China's Markets to find out more valuable investment opportunities. In 30th March, 2021, FTSE continuous to plan ahead to include the China Government Bonds to its WGBI Index, the benchmark to indicate the world government bonds performance.  FTSE Russell has approved for Chinese sovereign bonds to be included in its flagship bond index around this year (2021), setting the stage for billions of dollars of inflows into China Market. It is estimated that the inclusion would be done in around 3 years. FTSE asserts that the inclusion of the China Sovereign Bonds can reflects the robust index governance process and regular engagement with global investors, regulators and other key market participants. At the same time, China government als...

 How the Yield of 10-Year US Treasury Bonds Indicates in the Finance Markets Finance Knowledge/ News Sharing In 18thMarch, 2021, the yield of the 10-year US government bonds rises to highest of 1.738% . How the yield of the 10-year US government bonds represent to Finance and what is the indications of such increasing? Firstly, the 10-year US government bond's yield is the benchmark of borrowing costs across the market. A higher yield means that the cost of borrowing increases. Indications and Effects for the increase of 10-year US government bonds yield 1. Expected Inflation arises in the future Covid-19 pandemic improved As the Covid-19 pandemic may vanish in the future because of the vaccination, the economy of US may rebound and the Fed may increase the Fed Funds Rate. This may cause inflation of US in the future. As a result, the yield of the 10-year government bonds rises in respond to the expected inflation. 2. Stock Markets would drop to respond on the some stock value cal...

How the incision of China Government Bonds in FTSE Russell Indices Bring out Capital Inflow of China Recently, FTSE Russell had delisted some China Stocks like SMIC and Hikvision in its China A50 index because of the U.S. sanction measures. After the delisted, at least $10 billion flow out in the stock market. However, FTSE Russell is now planning to include China Government Bonds in its global index. According to Goldman Sachs, at least $10- $15 billion US Dollars flow into the China Government Bonds Market each month, an increase of $5 billion each month. The analyst points out that other global indices like  Bloomberg Barclays Indices and JP Morgen's GBI-EM index are also planning to include more China Government Bonds in its Index. Therefore, from my perspective, a more potential inflow of capital is planning to enter the China Bond Market. As China government bonds provide a higher yield to the investor, foreign investors are looking for more channels to get into China...