FX.co ★ China 10Y Yield Holds Near 5-Week High

On Monday, China's 10-year government bond yield remained stable around 1.78%, staying close to its highest point in five weeks as markets weighed a blend of economic and geopolitical factors. In terms of economic data, China's manufacturing activity rebounded, reaching 50.5 in August from 49.3 in July, surpassing the anticipated 49.5 and marking the strongest performance since March. This increase was driven by growth in new orders and purchasing activities, coupled with a slowdown in the decline of foreign demand, although the overall recovery was modest. On the global front, sentiment was influenced by a U.S. federal appeals court decision, which ruled that most of the reciprocal tariffs imposed by President Trump were unlawful, citing overreach in his authority with the broad tariffs announced in April. Additionally, investors monitored the relationship between India and China after their leaderships reiterated a commitment to partnership over rivalry during a two-day Shanghai Cooperation Organization (SCO) summit, where President Xi is anticipated to make a speech.