On the macroeconomic front, from January to October, China's industrial enterprises above the designated size achieved a total profit of 5.95029 trillion yuan, up 1.9% year-on-year. In November, the manufacturing PMI stood at 49.2%, rising 0.2 percentage points from the previous month, indicating an improvement in business sentiment. The business activity index for the construction sector was 49.6%, while that for the services sector was 49.5%.
Globally, the 10-year U.S. Treasury yield saw minor fluctuations last week. As of November 28, it declined by 2 basis points (bp) from the start of the week to 4.02%, while the effective federal funds rate remained at 3.88%. In September, U.S. seasonally adjusted nonfarm payrolls increased by 119,000, significantly surpassing the market expectation of 52,000. August’s nonfarm payrolls were revised downward from an increase of 22,000 to a decrease of 4,000, and July’s figures were adjusted from 79,000 to 72,000, resulting in a cumulative downward revision of 33,000 jobs. The U.S. unemployment rate climbed to 4.4%, the highest since October 2021. The eurozone’s benchmark rate held steady at 2.15%, and Japan’s policy target rate remained at 0.5%.
In the bond market, risk-free yields showed mixed trends. The 10-year government bond yield rose last week, while the 2-year yield declined. As of November 28, the 10-year government bond yield increased by 2 bp to 1.8412%, while the 2-year yield fell by 1 bp to 1.4183%. In terms of liquidity, M2 balance at the end of October reached 335.13 trillion yuan, up 8.2% year-on-year. The 7-day reverse repo rate stood at 1.40%. On November 28, the central bank conducted 301.3 billion yuan in 7-day reverse repos, with 375 billion yuan maturing the same day, resulting in a net liquidity withdrawal of 73.7 billion yuan. By October 2025, the outstanding social financing stock totaled 437.72 trillion yuan, up 8.5% year-on-year, with a 0.3-percentage-point gap from M2 growth, unchanged from September.
In terms of issuance, credit bond supply increased last week, with 427 bonds successfully priced, including 178 urban investment bonds (41.7% of the total). Average yields for 3-year and 5-year bonds across credit ratings showed divergent movements.
On policy and urban investment announcements, key developments include the National Development and Reform Commission’s push to expand infrastructure REITs into sectors such as urban renewal facilities, hotels, sports venues, and commercial properties. Market updates highlight the central bank’s 1 trillion yuan 1-year MLF operation on November 25, and the Ministry of Finance’s issuance of 95 billion yuan in discount bonds on November 26. Urban investment announcements primarily involved equity transfers, asset sales, and changes in controlling shareholders.
Far East Credit successfully hosted the "Qin-Ao Bond Market Innovation and Development Forum," exploring bond instrument innovation and cross-border asset allocation strategies to foster market growth. Additionally, in collaboration with Caida Securities and Urban Investment Home, it held a Shandong-focused launch event for the "2025 China Local Government Financing Platform Transformation Development Report."
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