CITIC-Prudential bond fund manager Wu Qiujun said the 10-year Chinese government
bond yield is trading near 1.73%, with a market focus on 1.70% — reaching that
level would imply roughly 2–2.5 bps of additional downside. The 30y–10y term
spread has continued to compress, leaving the ultra-long end with catch-up
upside; tactical swing positions in longer-dated bonds could generate returns.
China 30-year government bond futures around the 114 yuan level may trigger
short-term consolidation and volatility and should be monitored as an attention
window. Wu sees scope for further rate declines in Q4 and says the probability
of the 10-year yield breaching 1.70% will rise; on a 1–2 quarter or
multi-quarter holding horizon she considers there to be a basis for the 10-year
yield's central level to move below 1.70%.
