China’s 10-year government bond yield remained below 1.78%, hovering near a six-week low, as hopes for a potential peace deal in the Middle East eased global inflation concerns. Investor sentiment stayed cautiously optimistic despite China’s stronger-than-expected economic performance at the start of the year. The economy expanded 5% in the first quarter from a year earlier, accelerating from the previous quarter’s 4.5% growth and surpassing forecasts. Still, the recovery appeared uneven: industrial production and retail sales lost some momentum, and the unemployment rate rose to a thirteen-month high.
On the geopolitical front, the US and Iran are considering extending their current two-week ceasefire to allow more time for negotiations, even as the Strait of Hormuz remains effectively closed under a dual blockade.
Looking ahead, China plans to issue CNY 15.5 billion of government bonds in Hong Kong on April 22, the largest Dim Sum bond tranche since October 2023. The sale is expected to bolster offshore yuan liquidity and exert additional downward pressure on yields.
