As recently as October, investors could be forgiven for believing that China’s bull market in bonds had further to run.

With economic growth slowing and wholesale prices mired in deflation, the People’s Bank of China flooded the banking system with cash, keeping money-market interest rates at rock bottom levels. Investors were confident the central bank would have little choice but to continue easing, both to keep growth humming and to prevent a rise in debt servicing costs on China’s growing pile of corporate debt.

Now there are signs that the bond market faces a big test after the 10-year government yield soared to an 18-month high of 3.33 per cent late last week. Trading in 10-year government bond futures was briefly suspended after they fell by the maximum 2 per cent daily limit — the first such suspension since futures relaunched in 2013.