China bill yields jump after c.bank auction, GDP

SHANGHAI (Reuters) - China's two-year bill yield was quoted seven to eight basis points higher early on Thursday after strong second-quarter growth data and the central bank signaled it was still tightening liquidity in a weekly auction.

The central bank sold one-year bills at a yield of 1.5950 percent, above forecasts of about 1.50 percent and up 9 basis points from last week. Other money market rates were also higher, with the benchmark seven-day repo rate up 20 basis points at 1.500 percent.

The government announced that gross domestic growth rose a faster-than-expected 7.9 percent in the second quarter and reiterated that it would stick to a moderately easy monetary policy.

Traders said other short-term yields on financial bonds issued by policy banks also rose sharply, but yields at the long-end of curve were steady, causing the curve to flatten.

($1 = 6.83 yuan)

(Reporting by Karen Yeung; Editing by Eric Burroughs)