China's 30y govt bond futures gain as PMI trails estimates

China's 30y govt bond futures gain as PMI trails estimates

China's 30-year government bond futures have experienced a notable rise in recent trading sessions, coinciding with the release of disappointing manufacturing PMI data. The yield on China's 30-year bond, as reported on July 21, 2025, stood at 1.89%, marking a 0.01 percentage point increase from the previous session [1]. This upward trend is part of a broader pattern where the yield has edged up by 0.05 points over the past month, although it remains 0.59 points lower than a year ago.

The latest manufacturing PMI data, released on July 2, 2025, fell short of market expectations, indicating a slowdown in manufacturing activity. This development has likely contributed to the recent increase in bond yields, as investors seek safer havens in the face of economic uncertainty. The PMI data, which measures the health of the manufacturing sector, is a key indicator of economic growth and can influence market sentiment.

Historically, the China 30-year bond yield reached its all-time high of 5.25% in January 2014. As of July 21, 2025, the yield is expected to trade at 1.86% by the end of the current quarter, according to global macro models and analyst expectations [1]. Looking ahead, the yield is projected to further decrease to 1.78% in the next 12 months.

The rise in bond futures can be attributed to several factors. Firstly, the disappointing PMI data suggests that the Chinese economy may be facing headwinds, which could prompt the government to introduce further stimulus measures. Secondly, the increase in yields reflects investors' expectations of a potential slowdown in economic growth, driving them to seek higher returns from bonds.

In conclusion, the recent rise in China's 30-year government bond futures is likely a response to the disappointing PMI data and broader economic uncertainties. As investors continue to monitor the economic outlook and policy responses, the bond market is expected to remain volatile.

References:
[1] https://tradingeconomics.com/china/30-year-bond-yield