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28 Aug 2019
China-US 10-yr yield spread hits highest since December 2017
- The China-US 10-yr yield spread has widened to 20-month highs.
- Yuan is losing altitude despite the uptick in the yield spread.
The spread between the 10-year Chinese and US government bond yields has risen to 158 basis points, the highest level since December 2017.
Put simply, China's 10-year bond is now yielding 158 basis points more than its US counterpart. Even so, China's Yuan is losing altitude against the greenback. The USD/CNY pair is currently trading at 7.1568, the highest level since February 2008
It is worth noting that the 10-year yield spread is currently up 95 basis points on a year-to-basis while Yuan is reporting 4% losses on a year-to-date basis.
The Chinese currency has come under pressure due to escalating Sino-US trade tensions.
Yield spread
