20.10.202503:16:45UTC+00China 10Y Yield Hovers Near 6-Week Lows

China's 10-year government bond yield edged slightly lower to approximately 1.76% on Monday, resting near its six-week low as the market absorbed an array of new Chinese economic data. The nation’s economy decelerated for the second straight quarter, marking its weakest growth rate in a year. This was largely due to a decline in consumer spending and investment, despite robust export figures. Additionally, retail sales growth showed signs of slowing, and fixed-asset investment recorded its first decrease since 2020, underscoring ongoing challenges in the property market. Conversely, industrial production exceeded expectations, demonstrating steadiness in the manufacturing sector. On the monetary policy front, the People’s Bank of China kept the benchmark lending rates unchanged for the fifth month in a row, as anticipated, with the one-year and five-year loan prime rates remaining stable. Meanwhile, markets reacted positively to potential relaxation in Sino-US trade tensions, following US President Trump's remarks that described his proposed tariffs on Chinese goods as "not sustainable." This comes as preparations for upcoming bilateral discussions are underway.