China’s 10-year government bond yield fell to around 1.70% on Monday, nearing its lowest level in a year, as the launch of government bond futures in Hong Kong bolstered efforts to deepen market access. In its third attempt, China introduced five-year government bond futures, with the September contract debuting at 106.685 yuan per contract and a notional value of 500,000 yuan ($74,058). This rollout represents another step in China’s strategy to attract overseas investors and advance the internationalization of the yuan.
Meanwhile, the People’s Bank of China reiterated its commitment to supporting the real economy by maintaining a moderately loose monetary policy stance, fine-tuning policy tools as needed, and ensuring ample market liquidity.
On the economic front, the latest purchasing managers’ index (PMI) readings underscored renewed headwinds for China’s manufacturing sector. A private-sector survey showed the manufacturing PMI slipping to a four-month low in July 2026, while official data indicated that the sector contracted for the first time since February.
