Chinese financial markets see varied activity in April

The People's Bank of China's April 2026 Financial Market Report indicates increased activity in money and bond markets, alongside varied performance in other segments. Interbank lending and bond repo turnovers rose significantly year-on-year, while stock markets rallied.

Interbank activity surges, bond yields shift

In April 2026, the money market saw robust activity, with interbank lending turnover increasing by 46.0 percent year-on-year to an average daily RMB461.48 billion.

Bond repos in the interbank market also grew, with average daily turnover up by 36.2 percent year-on-year to RMB8.4 trillion.

Key overnight repo rates, DR001 and R001, both declined by 8-9 basis points month-on-month, settling at 1.23 percent and 1.30 percent respectively.

The bond market experienced a net financing of RMB904.11 billion via government bonds, a decrease year-on-year, while enterprise bond issuances raised RMB451.99 billion, an increase.

The yield on 10-year China government bonds (CGBs) stood at 1.75 percent, and the yield spread between 10-year and 1-year CGBs narrowed by 1bp month-on-month to 59bps.

Cumulative issuance of panda bonds reached RMB109.84 billion in the first four months of 2026.

Derivatives dip, stocks rally, RMB appreciates

RMB derivatives trading in the interbank market declined by 15.9 percent year-on-year to RMB7.1 trillion, though CGB futures trading rose 8.3 percent.

The bill market reported RMB4.6 trillion in accepted commercial drafts, with MSMEs contributing 73.8 percent of total issuance.

Gold trading volumes on major exchanges fell significantly.

The RMB appreciated 1.09 percent against the U.S. dollar, closing at 6.8335. China's stock markets rallied, with the SSE Composite Index up 5.7 percent and the SZSE Component Index up 12.1 percent month-on-month, indicating positive sentiment.

A nuanced picture of stability

The report reveals a nuanced picture of stability, with robust interbank activity balancing declines in derivatives and gold.

The RMB's significant appreciation against the U.S. dollar suggests underlying currency confidence despite varied market performance.

Overall, while some segments show strong growth, narrowing bond yield spreads point to a cautiously stable financial environment.