China’s government bond futures market posted gains across all tenures during Thursday’s trading session, with the 30-year contract leading the upward movement. The benchmark long bond futures rose to 120.820 yuan, marking a 0.24 percent increase, while shorter-dated contracts also recorded modest but consistent gains throughout the trading day.
Uniform Price Appreciation Reflects Market Sentiment
The 10-year government bond futures climbed to 109.160 yuan, representing a 0.14 percent gain from the previous close. Medium-term contracts followed the trend, with 5-year futures reaching 106.300 yuan after a 0.15 percent increase. The 2-year futures completed the positive picture, edging up 0.08 percent to settle at 102.540 yuan by market close.
Trading Activity and Yield Movements
Market participation remained robust, particularly in longer-dated instruments. The 30-year futures saw trading volume exceed recent averages by more than one-fifth, while the 10-year contract activity ran 15 percent above its 20-day mean. The increased demand pushed yields lower across the curve, with the 30-year government bond yield declining to 2.87 percent and the 10-year yield softening to 2.45 percent.
Fundamental Drivers Behind the Rally
Analysts attributed the bond market strength to growing expectations of additional monetary policy support following recent reserve requirement ratio adjustments by the People’s Bank of China. The uniform gains suggest institutional investors are positioning for potential economic headwinds, with insurance companies and commercial banks particularly active in extending portfolio duration. Foreign investors have also shown renewed interest in Chinese debt instruments amid shifting global rate expectations.
The yield curve flattened marginally during the session, with the spread between 10-year and 30-year yields narrowing to 42 basis points. Market participants will monitor upcoming economic data releases and policy signals for confirmation of whether this bond market momentum can sustain in the coming weeks. The futures rally occurred despite recent regulatory attempts to temper bond market enthusiasm through verbal guidance about herd behavior in fixed income markets.
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