Bond futures were launched on the China Financial Futures Exchange two years ago. This contract is based on a theoretical 10-year maturity with a face value of one million yuan (US$145,000). The collapse at the end of last year, taking yields from 2.6 per cent to 3.5 per cent, was in line with many other sovereign bonds. Prices have stabilised this year, working inside a fairly dramatic, if irregular, right-angled triangle with steady volume throughout. It hints that an interim base is in place with momentum and the MACD trying to go bullish. A sustained break above 50 per cent retracement will hit the target of 99 yuan or maybe the record high of 102.36 yuan.
