Hong Kong dollar $100 banknotes and a U.S. $100 banknote are arranged for a photograph in Hong Kong, China, on April 15, 2019. Photographer: Paul Yeung/Bloomberg.

Last week, China borrowed dollars in global credit markets at essentially the same cost as the United States, and traders immediately drove the yields on the bonds down even further.

China raised US$2 billion in a sale of three- and five-year notes. The securities were priced to yield just 1 and 3 basis points (bps), respectively, over similar-maturity Treasuries. Then, once trading kicked off Thursday, spreads tightened to about 24 and 25 bps under Treasuries, traders said.

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