China sells 30-year sovereign bonds at 2.2756%: trader

China sells 30-year sovereign bonds at 2.2756%: trader

The yield on China’s 30-year sovereign bonds rose to 1.89% on July 21, 2025, reflecting a 0.01 percentage point increase from the prior session and a 0.05 point rise over the past month, though it remains 0.59 points below its 2014 peak of 5.25%. Recent market activity indicates heightened sensitivity to policy expectations, with investors adjusting positions ahead of key government meetings in late 2025 and early 2026. Analysts note that fixed-income funds have acted as net sellers in recent weeks, contributing to volatility in long-dated bond futures.

Despite the short-term upward trend, the 30-year yield is projected to decline to 1.86% by the end of the current quarter and further to 1.78% within 12 months, according to macroeconomic models and expert forecasts. This trajectory reflects cautious optimism about monetary easing and growth stabilization, though uncertainties persist due to weak domestic demand and structural challenges in the property sector.

Market participants remain attentive to policy signals, particularly ahead of the Central Economic Work Conference, where growth strategies and fiscal measures may be outlined. Jeffrey Zhang of Credit Agricole CIB emphasized that 10-year China government bond (CGB) yields are likely to remain range-bound in 2026, contingent on the pace of economic recovery and central bank interventions. These dynamics underscore the delicate balance between near-term stimulus expectations and long-term fiscal sustainability in shaping China’s bond market outlook.