FX.co ★ China 10-Year Yield Inches Higher

China's 10-year government bond yield slightly increased to approximately 1.64% on Tuesday, remaining close to its lowest level in five weeks. This comes as investors anticipate further policy directives before the upcoming meeting of the People's Bank of China (PBOC). Recently, the central bank executed liquidity injections exceeding 1.4 trillion yuan through reverse repos, the second such operation this month. This approach has alleviated funding pressures and indicates a preference for targeted support rather than widespread monetary easing. Markets currently predict the PBOC will maintain the one-year and five-year loan prime rates as it seeks to balance economic stability with the management of borrowing costs amid persisting concerns. Traders are keenly observing for additional policy insights from Chinese officials at this week's Lujiazui Forum. Concurrently, escalating geopolitical tensions in the Middle East have driven oil prices up, stoking inflation worries and contributing to some upward pressure on yields. Nonetheless, ongoing trade uncertainties, including the ambiguous framework of the US–China trade deal, have prevented any significant market movements.