China’s 10-year government bond yield held steady to around 1.7% on Tuesday, hovering near three-month lows as investors weighed soft economic data and persistent global trade tensions. A private survey revealed China’s manufacturing activity unexpectedly contracted in May for the first time in eight months and at its sharpest pace since September 2022. This aligns with official PMI released Saturday, which showed factory output shrinking for a second straight month. These figures highlight the mounting impact of US tariffs and strengthen calls for greater stimulus to support growth. Meanwhile, tensions rose after China denied US accusations of violating a temporary trade deal, instead blaming Washington for breaking the agreement, signaling worsening relations. The EU also condemned Trump’s plan to double steel tariffs to 50%, warning it could undermine their own talks and threaten countermeasures. Investors now await progress from speculations of a Trump–Xi trade call this week.