China's bond market is currently experiencing a historic rally, leading traders to increase their leveraged bets in anticipation of further policy easing.

The concerns over potential US tariffs are driving this sentiment, as market participants seek to take advantage of the ongoing surge in local sovereign bonds.

According to recent data, the volume of overnight repurchase contracts reached its highest level since August 2023, indicating a growing reliance on this borrowing mechanism among traders looking to benefit from the extended bond rally.

As expectations for additional monetary easing rise, the dynamics of the bond market are shifting, reflecting broader economic concerns and strategic positioning ahead of key policy meetings.