16.09.202503:13:46UTC+00China 10Y Yield Hits Fresh 5-Month Peak

China's 10-year government bond yield increased to 1.88% on Tuesday, marking its highest point since early April. This rise is attributed to growing optimism regarding Sino-US trade discussions. President Trump indicated that the talks in Spain were making good progress, albeit somewhat overshadowed by Treasury Secretary Scott Bessent's announcement of a framework deal concerning TikTok's divestment, with commercial terms already agreed upon. President Trump and President Xi are scheduled to hold discussions on Friday regarding the agreement.

However, China has voiced criticism of a US proposal that suggests imposing substantial tariffs on Chinese goods linked to Russian oil, labeling the move as "unilateral bullying." Nonetheless, China has reiterated its preference for resolving issues through dialogue. In a related development, Tencent Holdings is planning its first offshore yuan bond issuance since 2021. This initiative may exert upward pressure on yields while potentially attracting international investors.

On the global stage, markets are keenly observing an eagerly awaited meeting of the Federal Reserve, with widespread expectations for an interest rate cut this month.