China markets record €5B euro bond as global rally builds

China kicked off marketing of up to €5 billion in sovereign bonds this week in what could be its largest-ever euro-denominated deal, as European markets rallied on Thursday buoyed by blockbuster earnings from Micron Technology ↘ 5.49% and declining oil prices.

China's Largest Euro Bond

The Chinese Ministry of Finance set initial price guidance for five-year, eight-year, and 12-year euro-denominated notes at 15, 22, and 33 basis points above the mid-swap rate respectively, according to the Business Times, citing a person familiar with the matter. The securities could be priced as early as Thursday.businesstimes

The deal would surpass China's previous record euro issuance of €4 billion in Luxembourg in November 2025. China's finance ministry had announced earlier in June that it planned to sell up to €5 billion of sovereign bonds in Luxembourg during the week of June 22. A group of 16 Chinese and global banks were mandated to arrange the sale, including Bank of China, HSBC ↗ 1.01%, JPMorgan ↗ 0.12%, Deutsche Bank ↗ 5.91%, Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.14%, and Citigroup ↘ 0.11%, according to Reuters.thestandard+1

Micron Earnings Lift Global Sentiment

The bond sale comes amid a broader rally in European equities on Thursday. Micron reported record fiscal third-quarter revenue of $41.46 billion, with non-GAAP earnings of $25.11 per diluted share, both well ahead of consensus estimates. The company projected fourth-quarter revenue of approximately $50 billion, far exceeding Wall Street's forecast of $43.2 billion.bloomberg+1

Micron's results sent its shares surging more than 16% in premarket trading and lifted chip stocks globally. The Wall Street Journal reported that the AI rally was "officially making a comeback," with Nasdaq 100 futures rising over 2% and international indexes in South Korea and Japan surging more than 4%.wsj+2

Broader Market Context

Oil prices extended their decline toward pre-war levels as tanker traffic through the Strait of Hormuz picked up following the U.S.-Iran memorandum of understanding signed earlier in June. The combination of easing energy costs and strong tech earnings provided a tailwind for risk assets across Europe and Asia.barchart

China's euro bond issuance reflects continued efforts by Beijing to diversify its funding sources and strengthen its presence in international capital markets. Foreign investors have been warming to Chinese bonds in recent months, with net purchases of onshore yuan-denominated bonds in May marking the first such inflows since April 2025, according to Reuters.reuters