SHANGHAI: Chinese government bond futures jumped on Tuesday and yields on benchmark treasury bonds hit a two-year low in the wake of authorities' latest move to loosen monetary policy in a bid to avoid a sharp economic slowdown.
Chinese 10-year treasury futures for March delivery, the most-traded contract, gained 0.55 percent on the day to 98.455. It was the single biggest daily gain for the contract in nine months.
At the same time, the yield on 10-year Chinese government bonds touched a low of 3.143 percent on Monday, according to Refinitiv data, its lowest level since Jan. 4, 2017.
Two Shanghai-based traders quoted the yield on benchmark 10-year government bonds even lower, at 3.11 percent.
The drop in onshore yields follows an announcement by China's central bank on Friday that it would cut banks' reserve requirements by 100 basis points in two stages on Jan. 15 and Jan. 25, releasing a net 800 billion yuan ($116.61 billion) for new lending after banks pay back maturing medium-term loans.
Analysts expect policy easing to continue in coming months as Beijing battles a slowing domestic economy and tries to counter the impact of a trade war with the United States.
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