Chinese investors sharply increased their investments in long-term government bonds. In October, net inflows into two ETFs tracking 30-year securities reached 13.8 billion yuan, or $2.1 billion. This is the highest figure since July 2025. Money flows out of riskier assets as the local stock market declines. Another incentive is the expected further reduction in borrowing costs. If market rates continue to fall, the 30-year Treasury yield could drop to 2% by the end of the year. For holders of securities already issued, such movement usually means an increase in their market price. The rush to ETFs shows what some investors are now counting on: not a quick recovery in stocks, but the benefit of lower rates. But the interest rate on long-term bonds is sensitive to changes in expectations. The more their price depends on future returns, the more painful a reversal in the interest rate trend may be for buyers. Ξeconomics.

Chinese investors sharply increased their investments in long-term government bonds. In October, net inflows into two ETFs tracking 30-year securities reached 13.8 billion yuan, or $2.1 billion. This is the highest figure since July 2025. Money flows out of riskier assets as the local stock market declines. Another incentive is the expected further reduction in borrowing costs. If market rates continue to fall, the 30-year Treasury yield could drop to 2% by the end of the year. For holders of securities already issued, such movement usually means an increase in their market price. The rush to ETFs shows what some investors are now counting on: not a quick recovery in stocks, but the benefit of lower rates. But the interest rate on long-term bonds is sensitive to changes in expectations. The more their price depends on future returns, the more painful a reversal in the interest rate trend may be for buyers. Ξeconomics.