China Yield Premium Over U.S. Vanishes as Treasury Yields Spike

(Bloomberg) — China’s benchmark 10-year government bond yield traded below that of its U.S. counterpart for the first time in more than a decade. That’s on growing bets for aggressive Federal Reserve policy tightening, while China sticks to its easing stance.

The yield spread between Chinese 10-year bonds and U.S. Treasuries fell to negative 0.20 basis points, the lowest since June 2010. Treasuries sold off as minutes of the central bank’s March meeting last week showed “many” officials would have preferred to raise rates by a half percentage point but were deterred by Russia’s attack on Ukraine.