〔Day Digest〕10Y UST at 5.33%, UK 30Y Pierces 6% as Yen-Carry vs JGB-Repricing Split Dominates the Rout — China Stands Apart with 25bp PSL Cut to 1.5%

0. Weekly Arc

The new quarter opened with a global long-end crack: the US 10-year reached 5.33%, breaking the 2007 peak and printing a level unseen since 2002, while the UK 30-year hit 6% for the first time since March 1998 and the French-German 10-year spread widened to 131bp, the widest since June 2012 ^[1][2]. Asia moved in the opposite direction — the PBOC cut the PSL rate 25bp to 1.5% and expanded its remit, while Finance Minister Lan Fo'an rolled out 300bn yuan of special treasury bonds for central financial institutions and a mortgage-interest subsidy that pulls new commercial rates toward 2% ^[3][4][5]. Equities diverged on the rates split: Nikkei +3.30% to 68,956.72 and KOSPI +1.95% to 6,971.36 in Asia, but FTSE 100 down 2% (its worst since May) and Stoxx 600 down 1.6% in Europe ^[1]. The cross-current test: does the Japan-led rout spread, or does China stand apart ^[1][2][6]?

1. China Policy Mix — PSL Cut, Mortgage Subsidy, Special Bonds

• **[NEW] PBOC cut the PSL rate 25bp to 1.5%, expanded the facility to the 'six networks' and a science-tech re-lending tool**; end-3Q issuance saw 5-year policy bank bonds at 1.5% and 5-year China Development Bank bonds at 1.51%, reopening the policy bank credit spread ^[3]. PSL balance stood at 630.8bn yuan at end-August, sharply down from the 3 trillion yuan peak in 2024 ^[3].
• **[NEW] Finance Minister Lan Fo'an article on Q4 work**: 300bn yuan of special treasury bonds to recapitalize central financial institutions, push consumption-tax collection downstream to local governments, accelerate integration of transfer-payment pilots, and step up hidden-debt resolution ^[4][7][8]. Civil-service 'tighten the belt' requirements and a three-year fiscal-supervision quality campaign were also flagged ^[9][10].
• **[NEW] Mortgage interest subsidy effective Oct 1** — the first central-fiscal subsidy on individual mortgages; new commercial loan rates drop to roughly 2% for loans up to 1m yuan, properties up to 120 sqm and 1.5m yuan ^[5]. The Housing Provident Fund rate (5-year-plus, 2.6%) advantage is now compressed ^[5].
• **[NEW] Wuhan released complete 828 new policy details** — the first new-tier-1 city to do so, classifying existing projects into five categories with prefab-specific transition windows and a guarantee-letter mechanism for substituting escrow funds ^[11].

2. Global Bond Rout — 10Y UST 5.33%, UK 30Y 6%, OAT-Bund 131bp

• **[ESCALATED] US 10-year at 5.33%** (+4bp on the day), breaking the 2007 high and the highest level since 2002; the 30-year also reached a 2002 high ^[1][2].
• **[ESCALATED] UK 30-year at 6.00%** — the first time since March 1998 ^[2].
• **[ESCALATED] French-German 10-year spread at 131bp**, the widest since June 2012, with French OATs at an 18-year high ahead of Thursday's budget disclosure; Bloomberg MLIV executive editor Mark Cudmore called France the 'epicenter' of the global bond storm ^[1][2].
• **[NEW] Japan 10-year JGB at 3.11%** ^[2].
• **[ESCALATED] Bloomberg Global Aggregate Treasury total-return yield at the highest since 2000**; the global bond market is down 2.7% YTD ^[2]. AXA chief economist Gilles Moec warned that even with thresholds broken, the long end 'may not have reached self-stabilizing levels' ^[2].
• **[NEW] US core PCE** printed below expectations, yet yields kept rising, undermining the 'cooling inflation eases the selloff' thesis ^[6].

3. The Japan Driver Debate — Carry Unwind vs JGB Repricing

• **[NEW] Yardeni Research (Ed Yardeni) view**: yen carry trade unwind is the principal amplifier — as the BOJ tightens, carry traders are forced sellers of foreign government bonds bought with cheap yen ^[6].
• **[NEW] Deutsche Bank counter-view**: it is JGB yields themselves repricing, not carry flows, that is driving the global move ^[6].
• **[NEW] Goldman Sachs data**: CTA trend-following funds hold net short positions of -$170bn DV01 globally, an all-time extreme — a record bearish positioning that signals selling pressure is not yet exhausted ^[6].
• **Implication for the trade**: the US bond rout stops when Japan's curve stabilizes; the JGB tape is the leading indicator ^[6]. The transmission debate is single-source relayed through one Wall Street outlet, so flag as thin until direct primary reports are read ^[6].

4. Real Economy Pulse — Holiday Travel, Developer Sales, Macau Gaming

• **[NEW] Holiday travel**: 219.36 million cross-regional trips on Sept 30, +29.3% m/m but -6.8% y/y; rail 19.542m (+42.2% m/m, +5.8% y/y), highway 196.54m, water 822k, civil aviation 2.451m ^[12][13].
• **[NEW] Property sales**: top-100 developers posted 2,259.72bn yuan in full-caliber sales in the first nine months; September single-month was 242.1bn yuan, up from 213.3bn in August and 217.9bn in July ^[14]. China Index Academy (Central China) center director Li Guozheng tied the September bump to late-August demand-side support in core cities including Shanghai, Beijing, Chengdu, Hangzhou ^[14].
• **[NEW] Macau September gaming revenue 18.063bn patacas**, -1.2% y/y — the fourth consecutive month of decline — versus a market expectation of +2.2% and -17.5% m/m; Jan-Sept totaled 187.116bn patacas, +3.2% y/y ^[15].

5. Cross-Border Plumbing and Source Quality

• **[NEW] In-Hong Kong Chinese brokerages tightening mainland client access**: Xingzheng International (06058.HK) from Sept 7, Guotai Junan International from Sept 26, and Orient Goldcontrol from October — mainland clients whose login IP shows mainland can sell and withdraw but not deposit or buy ^[16][17]. Tied to the May 8-ministry 'Comprehensive Rectification Plan for Illegal Cross-Border Securities, Futures and Fund Operations' ^[17]. Some Hong Kong-based Chinese brokerages have yet to restrict; foreign institutions are largely watching, but more adjustments are expected ^[16][17].
• **[NEW] Digital RMB cross-border**: 39 more domestic and foreign institutions applied to join the CBETS platform after an initial 26 signed, supporting both trade and cross-border personnel flows ^[18].
• **[NEW] Hong Kong-Zhuhai-Macau Bridge fresh food clearance extended from 16 to 24 hours**; Jan-Aug cumulative clearance exceeded 58,000 tons of vegetables, fruits and fresh seafood ^[19].
• **Source quality control**: the Japan-driver debate is single-source relayed via one Wall Street outlet (Yardeni/DB/Goldman) — flag as thin ^[6]. The Cudmore 'Thursday French budget disclosure' cue is forward-looking; the OAT-Bund spread move is already in the print ^[1]. On China rates, Gelonghui sees 10-year CGB near 1.70% and 30-year near 2.15% as a strong safety cushion, but short-term 'sell the fact' and a stronger-than-expected PMI may keep the tape range-bound ^[3].