PBOC Liquidity Support Drives China Bond Rally; 30-Year Yield Falls to 2.10%
China's bond market rallied on September 24, 2025, with the 30-year government bond yield falling over 1.5 basis points to near 2.10% and the 10-year yield edging down to 1.6670%. Treasury futures closed higher, led by the 30-year contract rising 0.31%. The People's Bank of China (PBOC) supported the market with an oversized Medium-term Lending Facility (MLF) operation and announced plans for overnight reverse repo operations from September 28 to October 8 with a daily cap of 1 trillion yuan to smooth quarter-end and holiday funding. Despite rising U.S. Treasury yields, Chinese bonds showed resilience. The PBOC conducted 51.5 billion yuan in 7-day reverse repos at 1.40%, resulting in a net withdrawal of 110.5 billion yuan. Short-term Shibor rates mostly edged up.
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China Bond Market Weakens Slightly; PBOC Injects Net 439.7 Billion Yuan for Quarter-End Liquidity
China's bond market edged lower on Monday (September 28), with treasury futures closing broadly down and yields on longer-dated bonds rising slightly while short-term yields were stable. The People's Bank of China (PBOC) conducted a net injection of 439.7 billion yuan through open market operations, including 7-day, overnight, and 14-day reverse repos, ensuring ample liquidity for the quarter-end period. Short-term interbank rates (Shibor) mostly declined. Analysts from Huatai Securities and Guosheng Securities offered views: Huatai noted that the renminbi's recent rally is driven by settlement capital flows rather than the China-US rate spread, and expects the currency to strengthen steadily, which is positive for bond market liquidity; they see limited trading room for 10-year and shorter bonds but still favor ultra-long bonds. Guosheng believes ultra-long bond yields have not yet peaked and may continue to decline, supported by lower government bond supply expectations and reduced bank deposit pressure. Overseas, US Treasury yields mostly fell, while Japanese yields rose.
China Bond Yields Fall as Central Bank Eases Liquidity; 30-Year Yield Nears 2.08%
China's bond market saw yields decline and the curve flatten in the week ending September 24, driven by easing liquidity after the tax period, bullish sentiment for holding bonds over the holiday, and equity market volatility. The 30-year government bond yield fell 5 basis points to 2.08%, while the 10-year yield edged down 1 basis point to 1.67%. The 30-year bond futures hit a new 2024 high of 117. The People's Bank of China (PBOC) conducted net liquidity injections via medium-term lending facility (MLF) operations, adding 200 billion yuan for the third consecutive month, and announced increased overnight reverse repo limits for the cross-period and holiday. Analysts from Guolian Minsheng Securities forecast further yield declines in early Q4, while Zhejiang Securities sees a shift from a single-sided rally to high-level volatility. Overseas, US Treasury yields surged to multi-year highs on strong economic data and oil price increases.
Read sourceChina Galaxy Securities: Funding Sentiment Stabilizes, Ultra-Long Bond Advantage Eyed
China Galaxy Securities' fixed income weekly report (Sept 20-24) analyzes the Chinese bond market, noting a slightly stronger but low-volatility market with a flattening yield curve. The 30Y, 10Y, and 1Y government bond yields changed by -4.4BP, -0.82BP, and +0.29BP respectively. The report forecasts that the People's Bank of China's (PBOC) proactive liquidity measures, including a raised overnight reverse repo cap to 1 trillion yuan and an 800 billion yuan MLF operation, will keep funding conditions stable and loose ahead of the quarter-end and holiday period. It expects the 7-day repo rate (DR007) to stay below the 1.4% policy rate. The report highlights that institutions (insurance, funds, brokerages) are heavily buying ultra-long bonds (20-30Y) for carry, while banks are reducing holdings. It advises a neutral-to-stable position, noting that while ultra-long bonds offer relative value, the 30Y-10Y spread at 41BP is near its yearly low, limiting further compression. Key risks include a stronger-than-expected economic recovery, faster government bond supply, and a sharp bond yield correction.
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China Bond Market Rallies as 30-Year Yield Drops Over 1.5 Basis Points
China's bond market performed strongly on September 24, with long-end yields declining broadly as stock markets retreated. The 30-year government bond yield fell over 1.5 basis points to near 2.10%, while the 10-year yield edged down 0.40 basis points to 1.6670%. Treasury futures closed higher across the board, led by the 30-year contract which rose 0.31%. Analysts attributed the resilience to the People's Bank of China's (PBOC) liquidity support measures, including an oversized Medium-term Lending Facility (MLF) operation announced late yesterday and plans for overnight reverse repo operations from September 28 to October 8 with a daily cap of 1 trillion yuan, aimed at smoothing quarter-end and holiday funding. Despite rising U.S. Treasury yields, the domestic market showed strength, with the compression opportunity for 30-year ultra-long bond spreads continuing to materialize. In open market operations, the PBOC conducted 51.5 billion yuan in 7-day reverse repos at 1.40%, resulting in a net drain of 110.5 billion yuan given 162 billion yuan in maturities. Short-term Shibor rates mostly edged up, with the overnight rate at 1.364%.
Read sourceChina Bond Market Rallies as 30-Year Yield Drops Over 1.5 Basis Points
China's bond market showed strength on September 24, with long-end yields declining as stock markets corrected. The 30-year government bond yield fell over 1.5 basis points to near 2.10%, while 10-year yields edged down 0.40bp to 1.6670%. Treasury futures closed higher across the board, led by the 30-year contract which rose 0.31%. Analysts attributed the resilience to the People's Bank of China's (PBOC) liquidity support measures, including an oversized Medium-term Lending Facility (MLF) operation and plans for overnight reverse repo operations from September 28 to October 8, with a daily cap of 1 trillion yuan. Despite rising US Treasury yields, Chinese bonds remained buoyant, with the 30-year ultra-long bond yield compression opportunity continuing to materialize. In open market operations, the PBOC conducted 51.5 billion yuan in 7-day reverse repos at 1.40%, resulting in a net drain of 110.5 billion yuan due to maturities. Money market rates were mixed, with the overnight Shibor rising slightly to 1.364%.
Read sourceChina Bond Market Rallies as 30-Year Yield Drops Over 1.5 Basis Points
China's bond market showed strength on September 24, with long-end yields declining as stock markets retreated. The 30-year government bond yield fell over 1.5 basis points to near 2.10%, while the 10-year yield edged down 0.40bp to 1.6670%. Treasury futures closed higher across the board, led by the 30-year contract which rose 0.31%. An industry insider attributed the resilience to the People's Bank of China's (PBOC) liquidity support measures, including an oversized Medium-term Lending Facility (MLF) operation announced late yesterday and plans for overnight reverse repo operations from September 28 to October 8 with a daily cap of 1 trillion yuan, aimed at smoothing quarter-end and holiday-period funding. Despite rising U.S. Treasury yields, the domestic bond market showed resilience, with the 30-year ultra-long bond yield compression opportunity continuing to materialize. In open market operations, the PBOC conducted 51.5 billion yuan in 7-day reverse repos at 1.40%, resulting in a net withdrawal of 110.5 billion yuan given maturing repos. Short-term Shibor rates mostly edged up, with the overnight rate at 1.364%.
Read sourceChina Bond Market Rallies as 30-Year Yield Falls Over 1.5 Basis Points
China's bond market showed strength on September 24, with long-end yields declining broadly as stock markets retreated. The 30-year government bond yield fell over 1.5 basis points to near 2.10%, while the 10-year yield edged down 0.40 basis points to 1.6670%. Treasury futures closed higher across the board, led by the 30-year contract which rose 0.31%. Analysts attributed the resilience to the People's Bank of China's (PBOC) liquidity support measures, including an oversized Medium-term Lending Facility (MLF) operation announced late the previous day and plans for overnight reverse repo operations from September 28 to October 8 with a daily cap of 1 trillion yuan, aimed at smoothing cross-quarter and cross-holiday funding. Despite rising US Treasury yields, Chinese bonds showed resilience, with the 30-year ultra-long bond yield compression opportunity continuing to materialize. In open market operations, the PBOC conducted 51.5 billion yuan in 7-day reverse repos at 1.40%, resulting in a net withdrawal of 110.5 billion yuan given maturing repos. Short-term Shibor rates mostly edged up, with the overnight rate rising 0.27 basis points to 1.364%.
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