China’s Minister of Finance Xiao Jie insists fiscal policy remains supportive for economic growth. This is reflected in the price of 10-year sovereign bond futures, where we are in the process of switching from the March 2018 contract to the one in June as the most active. Prices have rallied, as we predicted a month ago, and the small irregular double bottom has led to a break above a thin Ichimoku cloud. We are now back at levels that predominated in the fourth quarter of 2017, and benchmark yields are clearly below the psychologically important 4 per cent level. Allow for plenty of consolidation between 92.60 yuan (US$14.64) and 93.50 yuan, which should correct the slightly overbought condition, then onwards and upwards.

Nicole Elliott is a technical analyst