The yield on Chinese banks' one-year certificates of deposit fell to a historic low of 1.39%, Bloomberg reports. The dynamic stems from the People's Bank of China's decision to make the overnight repo rate of 1.25% the main indicator of monetary policy, instead of the previous seven-day rate of 1.4%. The market saw this step as a real easing of conditions, which led to cheaper interbank financing and a drop in the yield on 10-year Chinese government bonds to 1.6%.

The yield on Chinese banks' one-year certificates of deposit fell to a historic low of 1.39%, Bloomberg reports. The dynamic stems from the People's Bank of China's decision to make the overnight repo rate of 1.25% the main indicator of monetary policy, instead of the previous seven-day rate of 1.4%. The market saw this step as a real easing of conditions, which led to cheaper interbank financing and a drop in the yield on 10-year Chinese government bonds to 1.6%.