China Bonds Set for Best Month Since October on Ample Cash

China’s benchmark bonds are heading for their best month since October, as abundant liquidity offsets concerns over upcoming debt supply.

Yields on the 10-year sovereign bond fell just below 1.75% on Tuesday, marking a drop of around seven basis points this month. Ample cash is keeping a lid on supply concerns even as the government prepares to kick off its ultra-long special bond issuance with a record 30-year offering on Friday.