China’s 10-year government bond yield edged higher to around 1.64% on Tuesday but remained near five-week lows as investors awaited further policy signals ahead of the upcoming PBOC meeting. The central bank’s recent liquidity injections totaling over 1.4 trillion yuan via reverse repos, marking the second such operation this month, have eased funding pressures.
These measures signal a preference for targeted support over broad monetary easing, leading markets to expect the People’s Bank of China will maintain the one-year and five-year loan prime rates, balancing economic stability with manageable borrowing costs amid ongoing concerns. Traders now await more policy cues from Chinese officials at the Lujiazui Forum due this week. Meanwhile, rising geopolitical tensions in the Middle East have pushed oil prices higher, fueling inflation concerns and some upside on yields. However, ongoing trade uncertainties, including a vague US–China trade deal framework, have limited any sharp moves.
