Is China halting US Treasury purchases?

Janus Henderson's Bill Gross

Chinese officials responsible for reviewing the country's enormous foreign exchange reserves have recommended either slowing or stopping purchases of US Treasury bonds, Reuters reports via Bloomberg News.

The 10-year U.S. Treasury yield hit 2.57 per cent for the first time since March last year.

Gross cited three reasons for his bearish bond call: Rising nominal U.S. GDP that will stoke inflation, reduced purchases from global central banks, and higher budget deficits in the U.S.

"The Chinese are applying pressure to the Treasury market just as the Fed is about to step away from being the buyer of last resort", said Boris Schlossberg, managing director of FX strategy at BK Asset Management in NY.

"If China were to do something that created uncertainties in the government securities markets, China is a major foreign holder of US Treasuries, so it's deeply invested in that market" and wouldn't want to make any moves that could hurt its own position, said Sheets, who served as Treasury undersecretary for worldwide affairs in the administration of former President Barack Obama.

The euro was at $1.1939, up from $1.1935, and at ¥133.46-47, down from ¥133.61.

Later that month, Hu Xiaolian, director of China's SAFE, said Treasuries form "an important element of China's investment strategy for its foreign-currency reserves".

US shares snapped their rally on Wednesday while the Canadian dollar and the Mexican peso fell after a Reuters report said Canada increasingly believes that President Donald Trump will soon announce his intention to withdraw from the North American Free Trade Agreement treaty.

The retail sector was mixed after the Australian Bureau of Statistics said sales rose 1.2 per cent in November, driven by the release of the iPhone X and promotions such as Black Friday.

Brent crude rose 0.5 per cent to $69.15 per barrel, staying near its highest level since mid 2015.

March 2018 3-year bond futures contract at 97.785 (2.215pct), from 97.850 (2.150pct). "It's challenging to find any real substantial alternatives", with China earning dollars - the flip side of the US current account deficit. "I don't think that's worked out so poorly for the U.S". Major stock indexes in the United States were down only slightly on Wednesday, and the VIX index, which measures investor expectations of a sharp market move in the future, remained just over 10, a very low level.

Against a basket of currencies, the dollar was down 0.2 per cent. "But the earnings and economic outlook in Asia remains solid", said Yukino Yamada, senior strategist at Daiwa Securities. Last year, he called Federal Reserve Chair Janet Yellen a "modern day Goldilocks" and referred to quantitative easing as "financial methadone".

"The dollar may fall to around ¥110" in the days to come, the official said.

Related News:



Most liked

Suspect Arrested in Murder of UPenn Student Blaze Bernstein
Investigators also said they would not release details on the condition of Bernstein's body or what may have occurred at the park. Bernstein's mother, Jeanne Pepper, responded to news of the arrest on Twitter, writing, "Finally". "Revenge is empty.

Pakistan, US must work together to defeat terrorism, says Aizaz
The military aid is a suspension and not a cutoff for Pakistan. "Pakistan is also important to situation in Afghanistan". The Pakistani statement on Friday did not directly refer to Trump's tweet.

Schoolgirl declares that man with scissors cut her hijab
In a tweet, they described the suspect as Asian, in his 20s, with a medium build, black hair and a moustache. In 2016, there were 1,409 police-reported hate crimes, according to Canada's national statistical agency.

NFL Investigating Raiders' Possible Rooney Rule Violation After Jon Gruden Hire
Cable had been the Seahawks' offensive line coach and assistant head coach from 2011 until Wednesday, when he was sacked . In January 2011, Davis cited the latter situation when discussing Cable's departure.

Pakistan ends intelligence cooperation with U.S. as aid halts — Global Geopolitical Series
General Votel apprised the army chief about the U.S. decision regarding the USA security assistance and coalition support fund. The Afghan Foreign Ministry has welcomed Trump's measures against Pakistan whereas Indian reaction is not hard to gauge.

African ambassadors condemn Trump remarks as 'racist'
It was unclear why the four Republicans were there, and the session did not produce the results the two senators were hoping for. In a statement late Thursday, the White House did not dispute the vulgar language reportedly used by Trump during the meeting.

Chinese rescuers find two more bodies on burning Iranian tanker
The tanker is carrying 136,000 tonnes of light crude from Iran and there are fears the ship could explode and sink. The tanker Sanchi reportedly capsized and caught fire following the collision.

Zeman, Drahos Set for Runoff Vote in Czech Presidential Poll
Otherwise, the president has little executive power since the country is run by a government chosen and led by the prime minister. With this result, Zeman and Drahos will face a second and definitive electoral round on January 26th and 27th.

Scientists Find Deep Deposits Of Ice Below Martian Surface
Do you believe that the discovery of ice on Mars increases potential habitability? However, ice does reside below the surface. Apparently, the reserves begin at depths as shallow as one meter up to a hundred meters into the planet .

Saudi Arabia allows women at football game for first time
The Islamic kingdom has announced a series of reforms initiated by powerful Crown Prince Mohammed bin Salman since a year ago . Some pictures showed women with children entering the stadium, where signs were posted to indicate an entrance for families.

Trump Says US "Could Conceivably" Rejoin Paris Climate Accord
The president emphasised that he is not going to let the Paris agreement deny the US competitive edge. He also stated that the current agreement "took away a lot of [the country's] asset values".

Rising trend of casino apps
For those who are looking for a specific game, Cherry Rush also includes a description of what games can be found each site. It used to be that if someone wanted to play a casino game they had to find a land based venue.

Will Fiorentina continue the fight?
Another 16 goals brought Lorenzo Insigne, 13 goals went from Jose Callejon and 11 from Marek Hamšík. Forecasts Bookmakers consider Napoli as the main favorite - the coefficient for the victory of the hosts is 1.28.

Bets for upcoming Southampton vs Arsenal fight
Neither Arsene Wenger nor his players could afford themselves to lose another match if they still want to be in the top four. Arsenal is still keeping the dream to be qualified in Champions League after the victory over Manchester on Sunday.

3 Entertaining Ways to Improve Your Business Skills over the Coming Weeks
In both games and business meetings you may feel everything from frustration to elation, but the trick is to keep is all hidden. Play Poker While millions of people around the world may play poker solely for fun, you can also play to up your business game.