FX.co ★ China 10Y Yield Remains Subdued

China’s 10-year government bond yield steadied near 1.81%, holding on to its recent decline and remaining well below the two-month peak reached on March 9, as markets continued to monitor developments in the Middle East conflict. In a key development, US President Trump announced a two-week ceasefire agreement with Iran, following earlier threats of military action in the region. As part of the accord, Iran agreed to temporarily reopen the Strait of Hormuz, a vital artery for global oil shipments.

However, risk sentiment turned cautious amid reports that the 10-point framework lacks firm commitments from both parties, leaving the agreement fragile and incomplete. Against this backdrop, China remains comparatively better positioned than many of its Asian peers, underpinned by sizeable strategic oil reserves and relatively stable energy supply chains. Investors are now focused on inflation data due later this week, seeking further clues on the health of China’s economy and the implications for future monetary policy.