China’s 10-year government bond yield fell to below 1.83% on Monday, slipping back toward one-month lows as measures to deepen ties with Hong Kong boosted demand for offshore yuan bonds. The central bank plans to increase offshore issuance of yuan-denominated government bonds, expand swap facilities, and introduce yuan government bond futures in Hong Kong. Broader liquidity-management and hedging tools for global investors are also improving overseas access to Chinese bonds, helping contain long-term yields despite ongoing domestic issuance. China has recently issued a new tranche of ultra-long special treasury bonds to support infrastructure and equipment upgrades, putting pressure on prices. Markets now await upcoming PMI figures, with both official and private surveys due this week to gauge the country’s economic health. Elsewhere, focus is on trade developments as US President Trump warned that Canada could face tariffs of up to 100% if it finalizes a trade deal with China.
