Summary
- China bond traders are testing the limits of the central bank following a surprise interest-rate cut.
- Yields on the benchmark 10-year government bond slipped to 2.24%, potentially triggering intervention by the PBOC.
- The central bank had previously indicated 2.25% as a red line for intervention to curb the bond rally.
- Traders are closely monitoring the situation as bond yields approach critical levels set by the People’s Bank of China.
