Did China manipulate US treasury effects?

A week after the acute fluctuations in the US bond market, China’s treasury effects have become an increasing investigation by analysts around the world. Some have gone to the point – without conclusive evidence – that Beijing sales may have contributed to the payment of mortgage returns to achieve the highest increase since the corona pandemic, and the volatility that followed. Others discuss whether China liquidates US debt in the future as a kind of response to the serious customs duties that the United States imposed a century ago. “China can sell treasury effects as a revenge measure,” Ataro Okomura wrote, the main interest strategy of interest rates at ‘SMBC Nikko Securities’ in Tokyo, in a note to customers. And “If this is true, China has an incentive to show that it does not hesitate to cause unrest in the global financial markets to improve its negotiating ability against the United States.” The escalation of the Customs War War has expanded its global trade war this week by setting up major customs duties on the world exports to the United States, including a 145% tariff for all products coming from China. This decision shook the markets around the world and led to the withdrawal of US Treasury investors, which caused a leap in the long run, the largest since 2020. The absence of conclusive evidence attributed the analysts to this transformation to a set of basic and technical factors, including sales and anxiety for inflation stagnation. However, the hypothesis of the Chinese government’s intervention remains within the scope of speculation, as the activity of the circulation is one of the secrets that are carefully preserved. However, strategists often indicate that China’s large possession of treasury effects is a possible pressure point for the United States; Even if intense sales can pay heavy losses by cutting the value of its foreign currencies. However, a team of “Goldman Sachs” speculated that the sale of rooted assets in dollars could be a revenge option for China, while Ed Yardini, the founder of “Yardini Reserve”, said that investors in this regard could start anxiously about the possibility of Beijing and other major mortgagees around the world in liquidation operations. Economist Xiangrong Yu and Shinio G of City Group said they received many customers inquiries about whether China intended to sell its belongings. China is the second largest foreign owner of US debt. China is the second largest foreign owner of the US Treasury to Japan, and it has shrunk its possessions for a while for a while. According to the Numbers of the US Treasury for January, the interest has gradually dropped to the lowest level since 2011. However, the image is complicated because some of the prejudices recorded in the name of countries such as Belgium are presumably linked to China’s conservation accounts, and this has seen an increase. As for the total number of China’s US assets – from stocks and bonds guaranteed by the US government – it remained relatively stable. Although the Chinese authorities will issue data for April 7 for foreign exchange reserve, investors will have to wait until May 30 to see any real security change within the reserves. It is expected to have a clearer indication of the US financial portfolio data that will be released on June 18, which means that no one can confirm whether China has sold part of the possession of Treasury bonds. There was no immediate response from the Chinese Bank or the State Administration to foreign criticism on a request for comment, from Bloomberg) via fax. However, the Chinese controversy believes that China did not sell, and indicates the difference in the movement of yields on the various deadlines for US Treasury effects as evidence of this. The strategic store in ‘TD Ciscorites’, Brashant Nyon, who has already followed the US Treasury market, notes that China has reduced its purchases over the past few years, and it will probably also reduce the legal period of its belongings. He said: “If China had actually sold, it would have been supposed to rise in the short end of the curve, but it did not, and for that we doubted that China was one behind the sales.” He pointed out that “the current sales operations are mainly focused on the long point of the curve, which indicates a broader reverence by investors.” The US Treasury bonds have increased by 36 basis points this week, which is the highest increase since March 2022. The mortgage returns for thirty years increased by 48 basis points, while long -term connections saw that fluctuations were that exceeded the Witnesses. The impact of selling bonds on the US market has ‘GB Morgan’ analysts, including Jay Barry, in a note issued earlier this week, that each $ 300 billion decline in foreign official prejudices of US bonds for five years pays a rise by about 33 basis points. Since the recent official prejudices of China are $ 700 billion, that means a very big part of it should have been sold if Beijing was really behind this step. The hypothesis of China has acquitted Christopher Wood, head of the global stock strategy in ‘Geoffrez’, to the hypothesis that China sells treasury effects as a revenge measure despite the provinces. What happened is probably a disintegration of a common budget strategy between context effects and futures. He said: “The other most logical possibility is forced sales conducted by investors who use high financial crafts in budget agreements, as investors are trying to achieve profits from price differences.” He added that “such arbitration strategies have become an increasing part of foreign ownership of treasury effects.” Treasury effects are no longer a safe haven with Trump’s escalation of its comprehensive attack on global trade; The position of treasury ties has begun as a global safe haven facing increasing questions. These effects saw a rise during the global financial crisis, and after the attacks on September 11, and even when the United States credit rating was reduced, but the returns are now in an increase despite the decline in appetite for dangerous assets. “There are various possible reasons for the increase … including speculating that China is selling government bonds to show its power when the United States raises customs duties,” Gustav Helgons, the macro economic strategy in “BEE”, wrote in a note.