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Expand chart
Data: U.S. Department of the Treasury, Investing.com; Chart: Andrew Witherspoon/Axios

Even as foreign governments like China have reduced their holdings of U.S. Treasuries recently, appetite has continued to push prices up and yields down, with the benchmark 10-year note yielding its lowest since 2017.

The big picture: One major theme boosting U.S. bond buying has been that Treasuries hold significantly higher yields than comparable government bonds from developed market peers like Canada, Japan and the eurozone. While the U.S. remains the best house in a bad neighborhood, that yield premium is compressing.

What's happening: The differential between U.S. and German yields reached its highest level in modern history in November, but has fallen precipitously since then, notes Bannockburn Global Forex chief market strategist Marc Chandler. Against other countries, yield differentials that were extraordinary have been whittled down from all-time or decade-long highs to cycle lows.

  • U.S. 2-year yields were 85 basis points above Canadian yields in February, the most since the financial crisis, but have fallen to 45 basis points.
  • The 2-year was more than 100 basis points higher than comparable Australian yields just 2 weeks ago and is now just 75 basis points higher.

Why it matters: Market strategists are betting the bond market has further room to run, with rates continuing to fall, but if the U.S. yield premium vanishes, foreign buyers could do so as well.

  • That may also be bad news for the U.S. dollar, as lower bond yields make currencies less attractive to foreign buyers, but could be good news for U.S. multi-national firms who have been struggling with the dollar's prolonged strength. 

Go deeper: Bond yields are at historic lows around the world

Go deeper

Updated 15 mins ago - Politics & Policy

Arizona Republicans censure Cindy McCain and GOP governor

Combination images of Cindy McCain and Gov. Doug Ducey. Photo: FilmMagic/FilmMagic for U.S.VETS/Michael Brochstein/SOPA Images/LightRocket via Getty Images

Arizona Republican Party members voted on Saturday to censure prominent GOP figures Cindy McCain, Gov. Doug Ducey and former Sen. Jeff Flake (R-Ariz.), who've all faced clashes with former President Trump, per AZCentral.

Why it matters: Although the resolution is symbolic, this move plus the re-election of Trump loyalist Kelli Ward as state GOP chair shows the strong hold the former president has on the party in Arizona, despite President Biden winning the state in the 2020 election.

Updated 4 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Education: Schools face an uphill battle to reopen during the pandemic.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong puts tens of thousands on lockdown as cases surge — Pfizer to supply 40 million vaccine doses to lower-income countries — Brazil begins distributing AstraZeneca vaccine.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

DOJ: Capitol rioter threatened to "assassinate" Alexandria Ocasio-Cortez

Supporters of former President Trump storm the U.S. Captiol on Jan. 6. Photo: Kent Nishimura / Los Angeles Times via Getty Images

A Texas man who has been charged with storming the U.S. Capitol in the deadly Jan. 6 siege posted death threats against Rep. Alexandria Ocasio-Cortez (D-N.Y.), the Department of Justice said.

The big picture: Garret Miller faces five charges in connection to the riot by supporters of former President Trump, including violent entry and disorderly conduct on Capitol grounds and making threats. According to court documents, Miller posted violent threats online the day of the siege, including tweeting “Assassinate AOC.”

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