China’s 10-year government bond yield rose to around 2.6%, moving away from a three-year low hit earlier in August as investors reassessed China’s economic and policy outlooks. In the developments, Beijing introduced new measures to boost capital markets and shore up investor confidence by cutting the stamp duty on stock trading by half, among other measures. Earlier this month, the People’s Bank of China also lowered several benchmark lending rates to support a flagging economy. The central bank lowered its one-year loan prime rate by 10 basis points to a record low of 3.45% on August 21, but unexpectedly kept the five-year loan prime rate unchanged at 4.2%. The decision followed unexpected reductions in both seven-day reverse repurchase and the one-year medium-term lending facility rates. Investors now look ahead to Chinese manufacturing PMI figures for more clues on the economy.
Historically, the China Government Bond 10Y reached an all time high of 4.80 in September of 2007. China Government Bond 10Y - data, forecasts, historical chart - was last updated on August of 2023.
The China Government Bond 10Y is expected to trade at 2.59 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 2.65 in 12 months time.