Citi analysts Wenhan Chen and Rohit Garg opened a long position in 30‑year Chinese government bonds at a yield of 2.088%, eyeing a 1.80% target as current yields hover near 2.1%.
The move comes against a backdrop of higher global yields, where inflation has pushed rates up across major developed economies, while China’s subdued credit expansion keeps domestic yields comparatively low.
Citi notes that 90% of its planned 1.3 trillion yuan ultra‑long special treasury bond issue for 2026 has already been sold, with the remaining tranche slated for October.
A recent 360 billion yuan recapitalisation of key financial institutions is expected to tighten demand for longer‑dated bonds, helping push the 10‑year yield toward 1.60% from Monday’s 1.67%.
The bank also expects the spread between 10‑ and 30‑year securities to narrow, and anticipates conventional longer‑maturity issuances to resume in Q4, albeit at lower volumes than the ultra‑long bond cycle.