Bonds to rally from first quarter losses

China's biggest banks predict a strengthening yuan, and that reserve ratio cuts will ease a cash crunch helping bonds rally from their first quarter losses in almost two years.

According to study conducted by Bank of America Merrill Lynch indexes, corporate and government notes have lost 0.27 percent since the end of June, the first decline since the last three months of 2010.

Globally, emerging market securities have returned 6.3 percent, according to a separate index from the lender.

Separately, according to other data compiled by Bloomberg, The People's Bank of China will cut reserve requirements at least once more in 2012 as both the benchmark stock index and economic growth slump to the lowest in more than three years.

The central bank pumped a record amount of funds into the financial system with reverse- repurchase agreements on Tuesday, The yuan has risen 0.8 percent this quarter, reviving demand for Chinese assets.

China Daily-Agencies