From Bloomberg:
Yields on 10-year Chinese government bonds have been a strong indicator of earnings-per-share for emerging-market companies over the last five years, and the recent decline suggests a deteriorating outlook, Morgan Stanley strategists including Graham Secker and Jonathan Garner wrote in a note to clients Friday.
“What makes the move more disconcerting is that there has been a very close correlation between China yields and the global economic surprise index over the last year,” the strategists wrote. “This raises the question as to whether China is the potential source of slowing economic momentum through the global economy.”
