China 10Y Yield Remains Subdued

China’s 10-year government bond yield held its recent decline to around 1.81%, remaining well below a two-month high reached on March 9, as markets continued to assess developments in the Middle East war. In a notable development, US President Trump announced a two-week ceasefire agreement with Iran, following his earlier threats of military action in the region. As part of the deal, Iran agreed to temporarily reopen the Strait of Hormuz, a critical global oil shipping route.
However, sentiment turned cautious amid reports suggesting the 10-point framework lacks full commitment from both sides, leaving the deal fragile and incomplete. Meanwhile, China remains relatively better positioned among Asian peers, supported by the country’s large oil stockpiles and comparatively stable energy supply chains. Investors are now turning their attention to upcoming inflation data later this week for further insight into China’s economic health and the potential impact on monetary policy.
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