China’s 10-year government bond yield fell to around 1.73% on Thursday, approaching its lowest level in three weeks, as plans by the People’s Bank of China to introduce overnight reverse repo operations raised expectations of easier liquidity conditions. The PBOC said it will conduct overnight reverse repo operations on June 29–30, providing fixed-rate overnight liquidity to better meet short-term funding needs in the banking system. The new overnight rate will complement the existing 7-day rate of 1.4%, aligning the PBOC’s policy framework more closely with global peers. The move follows Governor Pan Gongsheng’s remarks at the Lujiazui Forum, where he signaled plans to expand overnight operations. Meanwhile, China launched marketing for up to €5 billion ($5.7 billion) of euro-denominated sovereign bonds, which could be its largest euro issuance on record, with initial price guidance set at 15, 22, and 33 basis points over mid-swaps for the 5-, 8-, and 12-year tranches, respectively.

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