China’s 10-year government bond yield held steady at around 1.78%, hovering near a six-week low, reflecting cautious market optimism amid expectations of a modest improvement in the near-term growth outlook despite persistent geopolitical risks. The economy is projected to expand by 4.8% year-on-year in Q1 2026, slightly up from 4.5% in the previous quarter, which marked the slowest pace since the post-pandemic reopening in 2022. The gradual improvement gives policymakers additional room to evaluate external risks, such as the ongoing Middle East conflict, before adjusting monetary or fiscal stimulus. Meanwhile, China’s Ministry of Finance is scheduled to issue CNY 15.5 billion of government bonds in Hong Kong on April 22, marking the largest single tranche of Dim Sum bond issuance since October 2023. The move is in line with broader efforts to expand offshore yuan bond issuance and support liquidity in offshore markets, as previously signaled by People’s Bank of China officials.
