FT News Briefing

This bond market rally is epic

Dec 21, 2023

11:05

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The podcast discusses the epic rally in the bond market and the unexpected fall in bond yields. It also explores the significant drop in enrollment in China's government-subsidized health care program. Additionally, it delves into China's shifting economic model and India's employment problem. Lastly, the podcast explores the challenges faced by garment factories in India.

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Quick takeaways

The bond market is experiencing an unexpected rally, driven by investor optimism following the Federal Reserve's indication of possible interest rate cuts in the coming year.

China is seeing a significant number of people dropping out of the state health insurance system, which could negatively impact domestic consumption and the country's goal of shifting to a consumption-driven economic model.

Deep dives

Bond Market Witnesses Epic Rally with Falling Yields

The bond market is experiencing an unexpected rally, with US Treasury yields falling below 4% and dropping by almost a full percentage point since October. This rally has surpassed the forecasts of major banks by more than a year. It is driven by investor optimism following the Federal Reserve's indication of possible interest rate cuts in the coming year, leading the swaps market to price in six rate cuts for 2024, up from the initial prediction of three.

Introduction

3min

The Drop in Enrollment in China's Government-Subsidized Health Care Program

2min

Shifting Economic Model in China and India's Employment Problem

4min

Challenges Faced by Garment Factories in India

3min

A global rally in government debt has driven yields past many Wall Street targets for the end of 2024, and rising premiums in China are driving families to cancel health coverage. Plus, in the second of a three-part series, the FT’s Benjamin Parkin travels to southern India to see whether factories can help solve the country’s employment problems.

Mentioned in this podcast:

Bond market rally drives yields past Wall Street’s end-2024 targets

Millions drop out of China’s state health insurance system

The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help by Sam Giovinco, Peter Barber, Michael Lello, David da Silva, Gavin Kallmann and Joanna Kao. Our engineer is Monica Lopez. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

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