By Charlie Zhu, Helen Sun, Bloomberg markets live reporters and strategists

The rally in Chinese government bonds resumed despite seemingly rosy holiday spending data. The 10-year benchmark yield fell to another record while its 30-year peer breached its January low, as economists called for further measures to boost consumption.

While travel and movie attendance broke records during the Lunar New Year holiday, a closer look showed that average daily spending on each trip remained below the pre-pandemic level. Analysts at Macquarie Group Ltd. pointed to slower growth in disposable household income, which was 5.3% last year versus an annual average of 9% during 2014-2019.
“Beijing’s ability to fight another trade war is constrained by weak domestic economy,” Macquarie economists Larry Hu and Zhang Yuxiao wrote in a report. The government may be forced to boost domestic demand, as it can reduce the trade surplus and provide room to maneuver amid trade tensions, they added.