China 10Y Yield at Near 2-Month Low

China’s 10-year government bond yield fell to around 1.67% on Tuesday, nearing its lowest level since mid-July, as robust trade data strengthened expectations that external demand will support economic growth. Exports surged 25.0% year-on-year to USD 401.44 billion in August 2026, accelerating from 23.9% growth in July, while imports jumped 28.2% to USD 282.4 billion, up from 27.5% in the previous month and marking an eighth consecutive month of double-digit growth. The trade surplus widened to USD 119.09 billion in August from USD 101.09 billion a year earlier, matching expectations. The solid trade performance comes as Washington intensifies pressure on Beijing to narrow trade imbalances ahead of a planned Trump-Xi meeting, while trade frictions between Beijing and Brussels are also intensifying ahead of an October deadline to address imbalances that EU leaders increasingly regard as a strategic concern.

China’s 10-year government bond yield fell to around 1.67% on Monday, hitting its lowest level since mid-July, as a fresh batch of PMI data reinforced expectations that the economic recovery is gradually gaining momentum. A private survey showed the Composite PMI rising to 52.1 in August from 50.8 in July, with growth strengthening across both manufacturing (51.5 vs 50.9) and services (51.4 vs 50.4). The upbeat reading came alongside official data showing the composite PMI edging up to 49.5 from 49.3, as manufacturing activity improved (49.8 vs 49.2), while the non-manufacturing PMI was unchanged at 49. Investors now await trade and inflation data later this week. Meanwhile, China is injecting CNY 300 billion ($45 billion) into its largest banks and insurers as part of the country’s biggest financial-sector recapitalization in nearly two decades, aimed at strengthening balance sheets and supporting credit growth amid a slowing economy.

China's 10-year government bond yield rose to around 1.68% on Wednesday, staying away from a recently reached one-year low after the People's Bank of China left its benchmark lending rates unchanged at record lows for the fifteenth consecutive month. The central bank left the one-year loan prime rate (LPR) at 3.0% and the five-year LPR at 3.5%, signaling a measured policy approach as it reiterated its commitment to maintaining an accommodative monetary stance. Meanwhile, expectations for additional stimulus measures remain elevated following a string of weak July economic indicators, including softer industrial output, retail sales, and fixed-asset investment data. Markets are now turning their attention to the National People's Congress Standing Committee meeting in Beijing from August 25 to 28, where investors will watch closely for fresh policy guidance and potential stimulus measures to support economic recovery.