On September 30, 2024, China's 10-year sovereign bonds saw a significant decline, marking their largest weekly drop in a decade. This downturn is attributed to investors shifting towards risk assets in anticipation of a comprehensive economic stimulus aimed at revitalizing growth.
The yield on the benchmark debt rose by five basis points to 2.22%, reaching its highest level since August. This surge follows a notable increase of 21 basis points in 10-year yields the previous week, representing the largest weekly gain since late 2014.
The implications of this shift are profound, as it suggests a growing confidence among investors in the potential for economic recovery driven by government interventions. However, this also raises concerns about the sustainability of such growth and the possible long-term effects on China's debt market.
Source: Bloomberg, September 30, 2024.