FX.co ★ China 10-Year Yield Stays Near 3-Month Lows

On Tuesday, China's 10-year government bond yield was observed around 1.63%, remaining near its lowest point in three months. This comes as investors returned from the Labor Day holidays, focusing on the current state of China-US trade relations. Initially, there was optimism about progress in discussions on tariffs, but recent developments have dampened these hopes. Notably, President Trump announced a hefty 100% tariff on movies produced overseas and proposed tariffs on pharmaceuticals. Additionally, Trump stated he has no immediate plans to confer with President Xi Jinping this week, although he showed a willingness to consider lowering the existing 145% tariff on Chinese imports. Compounding these economic pressures, recent weak PMI data underscored the lingering impacts of the Sino-US trade tensions. A private survey revealed that China's services sector experienced its slowest growth in seven months during April, while the Composite PMI fell to a three-month low, notwithstanding the fact that this marks the 18th consecutive month of growth in the private sector.