China Bonds Spark Global Demand as USD Demand soars

China’s return to the international bond market has triggered an unprecedented global response, attracting over $118 billion in orders for its latest offering of USD-denominated bonds. The Ministry of Finance sold $4 billion worth of notes, split evenly between three and five year maturities. This marked a decisive move by China to solidify its sovereign yield curve and create a more transparent framework for future international borrowing. Notably, half the bonds were priced in line with U.S. Treasuries, while the remaining portion carried only a minimal two-basis-point premium, highlighting investors’ trust in China’s creditworthiness.