FX.co ★ China 10Y Yield Rises After PBoC Decision

China’s 10-year government bond yield climbed toward 1.74% on Monday, rebounding from the prior session even as the People's Bank of China held key lending rates at record lows for a fourteenth consecutive month in July. The PBoC kept the one-year loan prime rate, the benchmark for most corporate and household lending, unchanged at 3%, while the five-year LPR, a key reference for mortgage rates, remained at 3.5%.

The decision came despite weaker-than-expected second-quarter GDP figures, underscoring the uneven nature of China’s economic recovery. Manufacturing and exports have remained relatively resilient, but soft domestic demand and muted household consumption continue to drag on overall growth momentum.

Investor focus is now turning to the upcoming Politburo meeting later this month, a closely watched event that may offer signals on further fiscal and monetary support. Markets are looking for potential measures to bolster domestic demand, stabilize the property sector, and underpin broader economic expansion.