China’s 10-year government bond yield inched up to 1.71% on Wednesday, rebounding from a near ten-month low in the previous session, as investors reassessed the domestic economic outlook in light of mixed PMI readings.
A private survey showed that China’s composite PMI rose to a three-month high of 54 in May, with the services PMI also climbing to a three-month peak of 54.4. In contrast, manufacturing momentum softened, with the manufacturing PMI easing to 51.8 from April’s five-year high of 52.2.
Earlier in the week, official data indicated that the composite PMI increased to 50.5 from 50.1, supported by a modest improvement in non-manufacturing activity (50.1 vs. 49.4). However, the official manufacturing PMI slipped back to the 50 threshold that divides expansion from contraction, down from 50.3.
Investors are now looking ahead to a fresh set of key economic indicators due next week—particularly trade balance and inflation data—which are expected to provide further insight into the strength of external demand and underlying price pressures amid ongoing tensions in the Middle East.
