FX.co ★ China 10Y Yield Retreats

China’s 10-year government bond yield fell to 1.70% on Friday, pulling back from a near one-month high in the previous session, as yuan-denominated debt continued to attract global borrowers seeking lower-cost funding. Regulators have approved the offshore transfer of proceeds from more than 40% of all panda bonds issued this year—a record share—amounting to as much as CNY 130 billion ($19 billion). Foreign issuers had raised CNY 115.5 billion through October 8, double the total for all of last year, and now represent 47% of the market, up from 13% three years ago.

At the same time, investors were watching China-EU trade talks scheduled to conclude later on Friday. European industry groups pressed for swift measures to counter what they describe as unfair Chinese trade practices, warning of mounting pressure on EU manufacturers and the risk of further job cuts. The negotiations come after three months of discussions on the bloc’s goods trade deficit with China and on Beijing’s export restrictions involving rare earths and other critical minerals.