China 10Y Yield Slips on Strong Trade Data

China’s 10-year government bond yield slipped to around 1.76% on Monday, snapping a two-session gain, as stronger-than-expected trade data reinforced confidence in the economy ahead of a closely watched Trump-Xi meeting. China’s exports surged 14.1% year-on-year to a record USD 359.44 billion in April 2026, well above forecasts for a 7.9% increase and sharply accelerating from March’s 2.5% growth. The strong performance was driven in part by sustained global demand linked to the artificial intelligence investment boom, which helped offset disruptions to shipping routes following the closure of the Strait of Hormuz. Imports also rose strongly, climbing 25.3% from a year earlier to an all-time high of USD 274.62 billion. Market attention is now turning to the Trump-Xi meeting in Beijing later this week, where the two leaders are expected to discuss the Middle East conflict, Taiwan, and a potential framework for renewed trade negotiations between the world’s two largest economies.

China’s 10-year government bond yield edged lower to around 1.75% on Friday, extending a modest decline from the previous session as investors positioned ahead of Trump–Xi summit next week. The two leaders are expected to meet in Beijing on May 14–15, which was previously postponed due to heightened tensions linked to the Middle East conflict. In a fresh escalation in the region, three US Navy destroyers transiting the Strait of Hormuz reportedly intercepted Iranian attacks and conducted retaliatory strikes. Uncertainty still surrounds the visit, with reports suggesting Beijing remains cautious about moving forward while the US–Iran standoff shows no clear signs of de-escalation. Separately, China’s financial regulators have reportedly instructed major banks to halt new financing for five US-sanctioned refineries over alleged Iranian oil ties—marking a notable shift from earlier guidance that encouraged lenders to disregard US sanctions.

China’s 10-year government bond yield steadied at 1.75%, following two straight sessions of losses as investors assessed the latest PMI figures. Official data showed manufacturing PMI edged down to 50.3 in April from 50.4 in March, but still beat the market expectations of 50.1 and remained in expansion territory for a second straight month. RatingDog also revealed that the manufacturing PMI rose to 52.2 from 50.8, above forecasts of 51 and marking its highest level since December 2020. The recent PMI signalled resilience in China’s industrial sector, supported by strategic petroleum reserve management and sustained investment in renewable energy amid external risks from prolonged Middle East war. Separately, US President Trump is expected to visit China on May 14–15, with reports suggesting Taiwan may feature more prominently in discussions than during their previous meeting in South Korea, where it was largely avoided. China’s bond markets will be closed from May 1–5 for Labour Day.