FX.co ★ China 10Y Yield Hits Five-Week Low

China’s 10-year government bond yield fell to approximately 1.75% on Monday, marking its lowest point in five weeks as investors shifted towards more secure assets. This movement followed US President Donald Trump's announcement of a potential additional 100% tariff on Chinese imports, a response to Beijing’s new restrictions on rare earth mineral exports. China has pledged to retaliate if the tariffs are enacted and has taken a firm stance by declaring it is "not afraid" of a trade war. Analysts suggest that Beijing’s recent actions may serve to bolster its position ahead of upcoming negotiations. Nonetheless, in subsequent statements to the media, Trump expressed optimism about trade relations with China, suggesting that "everything will be fine" and indicating a willingness to engage in discussions, including a possible meeting with President Xi. Simultaneously, attention is also focused on China’s trade data for September, expected to be released later today. This data is anticipated to show a narrowing trade balance, with exports likely rising at a faster pace than imports.