FX.co ★ China 10Y Yield Starts the Year Lower

China's benchmark 10-year government bond yield dipped below 1.86% as the year commenced, as investors assessed the latest Purchasing Managers' Index (PMI) figures for insights into the nation’s economic trajectory. According to a private survey, China’s composite PMI remained expansionary for the seventh consecutive month in December, albeit with the weakest growth in services activity in half a year. In contrast, official data from last week reported that the composite PMI had surged to a six-month high, with manufacturing activity unexpectedly returning to expansion and the services PMI climbing to a four-month peak. As markets anticipate further insights from upcoming trade balance and GDP statistics this month, President Xi Jinping expressed at the annual session of the Chinese People’s Political Consultative Conference that the economy is poised to meet its 2025 targets, with GDP growth projected at approximately 5%. He also emphasized that Beijing plans to implement more proactive macroeconomic measures in 2026 to maintain economic momentum.