Shanghai

CHINA'S anti-leverage campaign is causing a distortion that hasn't happened in the nation's US$9 trillion bond market in at least a decade.

The five-year sovereign yield is now higher than that on debt due in a decade, the first time the curve has inverted for the tenor in data going back to 2006. This is due mainly to a surge in the shorter-term yield because of a deleveraging campaign, and a limited advance in the 10-year cost as economic growth concerns raise demand for safety.