China officials apparently saying they view US Treasuries as less attractive – Livesquawk

by | January 10th, 2018, 10:27:55 | News | 9 comments

Livesquawk picking up chatter from Chinese officials

  • Officials supposedly recommend slowing or halting US Treasury buying
  • They are looking at US debt supply and trade tensions

This is going to add to the bond sell off (rising yields)

This could be very big news given the bond market jumpiness right now. US 10’s have pushed up to a high of 2.571%. The story comes from Bloomberg, and we know how they can spin stuff. The last comment could just make this some posturing over trade arguments with the US but bear in mind that the Chinese are the biggest foreign holders of US debt and all hell would break loose if they started dumping it.

I’ll also add that such news would not be positive for the dollar in the case of rising yields in this circumstance.

 

Ryan Littlestone
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9 Comments

  1. K-man
    K-man on January 10, 2018 at 11:00 am

    If they put their money where their mouth is and a rotation takes place , EURO should be the main beneficiary , hence that should be the outperformer joining the JPY

    • Ryan Littlestone
      Ryan Littlestone on January 10, 2018 at 11:02 am

      Agreed. It will probably go into, EUR, GBP, AUD and possibly CAD.

      • K-man
        K-man on January 10, 2018 at 11:03 am

        For the stats:
        -As of the Oct US TIC data the China Total holding of US Treasuries: $1.19T v $1.18T prior

        -China and Japan account for about two-fifths of all foreign ownership of Treasuries

  2. Coty
    Coty on January 10, 2018 at 2:14 pm

    Their impact can be huge no doubt but China is not the largest holder of US gov debt. The US social security trust fund is the largest holder followed by the Fed.

    • Coty
      Coty on January 10, 2018 at 2:17 pm

      Impact still huge but it’s interesting to contemplate that if the Chinese sold all us gov debt it would reverse the NON mortgage backed part of US QE by about half

      • Ryan Littlestone
        Ryan Littlestone on January 10, 2018 at 2:30 pm

        It would interesting to see what the Us would do with yields up at 4-5%+ if the Chinese sell up.

      • Ryan Littlestone
        Ryan Littlestone on January 10, 2018 at 3:53 pm

        BTW, good shout back in Nov on the euro running up into and over the New Year, and followed by bank reccos.

        • Coty
          Coty on January 11, 2018 at 10:34 am

          Thanks Ryan!!

    • Ryan Littlestone
      Ryan Littlestone on January 10, 2018 at 2:28 pm

      Largest foreign owners. ( I’ll make that clearer on the post)

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