China 10-year bond yield drops below 3% for first since December 2016

• China's 10-year yield prints lowest level since December 2016. 
• China's industrial production in July grew at its lowest rate since February 2002.

China's 10-year government bond yield fell below 3% in response to a weaker-than-expected macroeconomic data released at 02:00 GMT.

The markets last saw sub-3% yield in December 2016.

Dismal data

China's industrial production grew by just 4.8% in July, the worst growth since February 2002. Further, Retail sales, a key metric of consumption, rose 7.6 percent in July, down from 9.8 percent growth in June.

With consumption struggling to compensate for the risks arising from the external sector, China's economy looks vulnerable for a deeper-than-expected slowdown in the near future.

As a result, the path of least resistance for the 10-year yield is to the downside.

The yield has come under pressure of late, tracking the slide in the bond yields across the globe and due to unrest in Hong Kong.