News Worms
News Worms

China Weighs Slowing or Halting Purchases of US Treasuries

China Weighs Slowing or Halting Purchases of US Treasuries

The yield on 10-year U.S. Treasury hit a 10-month high of 2.59 percent in European trade and was up 4 basis points on the day, pushing the dollar to a six-week low against the Japanese yen. It isn't clear whether the officials' recommendations have been adopted.

Bloomberg News reported Wednesday, citing people familiar with the matter, that officials in Beijing have recommended the Chinese government lower - or even stop - its buying of US sovereign debt.

The market for US government bonds has become less attractive relative to other assets, including sovereign debt issued by other countries, according to the Chinese review.

Malpass, who heads global affairs for Treasury, also reiterated his concerns about China's emphasis on its state-owned enterprises and government subsidies that distort capital allocation.

The People's Bank of China would trigger a selloff if market participants believed it has truly soured on Treasuries, which would cause the value of its own reserves to fall.

The reasons include Chinese officials thinking U.S. debt is becoming less attractive compared to other assets, and trade tensions between the two countries. The strategies discussed in the review don't concern daily purchases and sales, said the people. The two economic powerhouses have long maintained a debt-fueled trade policy, but with the USA debt expected to increase further, Beijing may be losing its appetite for Treasurys.

The $14 trillion Treasury market has been roiled in the past 48 hours.

"The US Treasury market is a deep, robust market within the world and so we are confident that our economy, with the economy strengthening, that it will remain a deep, robust market", Mr Malpass told reporters. Instead of just stopping its purchases of U.S. debt, it could start selling some of the paper it has. The Treasury Department said in its most recent quarterly refunding announcement in November that borrowing needs will increase as the Federal Reserve reduces its balance sheet and as fiscal deficits look set to widen.

Rising Treasury yields can pressure prices for Gold, but USD's slide helped Gold shrug off any impact.

"It's a complicated chess game as with everything the Chinese do", said Charles Wyplosz, a professor of global economics at the Graduate Institute of worldwide and Development Studies in Geneva.

A senior United States official downplayed the impact of possible scaledown of Chinese purchases of Treasuries.

Market-watchers say unrest in key producer Iran could dent the country s capacity, while others point out that any suppression of protests by Tehran could also lead Trump to reimpose export sanctions. The benchmark 10-year yield touched 2.597 percent, its loftiest level since March, according to Reuters data.


editors' picks

January 11, 2018
Donald Trump could use NAFTA withdrawal letter as negotiating leverage
They have so far yielded little firm indication of whether a deal can be reached to update the pact, the Canadian officials said. The Canadian and Mexican currencies both weakened against the US dollar after the news.

January 11, 2018
Pirates Agree To Trade Gerrit Cole To Astros
His best season came in 2015 when he went 19-8 with a 2.60 ERA, 1.091 WHIP and 202 strikeouts in 32 starts. Cole also contributed to Pittsburgh's 2013 postseason run, making two October starts as a rookie.

January 11, 2018
4-year-old boy dies from flu in Ohio
It's been a busy time for the hospital with all of the people stopping by the emergency room with flu like symptoms. The Ohio Department of Health released information Wednesday afternoon about a young boy who has died from the flu.

January 11, 2018
SpaceX defends rocket performance after loss of United States spy satellite
According to one source, the payload fell back to Earth along with the spent upper stage of the Falcon 9 rocket. The company has said it plans about 30 missions in 2018 after completing a record 18 previous year .

January 10, 2018
New 'Black Panther' Trailer Has More Action, Awesomeness - Twitter Users React
Lamar and Anthony "Top Dawg" Tiffith will curate and produce " Black Panther: The Album", which does not yet have a release date. Jordan , Forest Whitaker , Letitia Wright, Lupita Nyong'o , Daniel Kaluuya, Martin Freeman, Danai Gurira and Andy Serkis .

January 10, 2018
Meghan Markle Just Deleted Her Instagram and Twitter Accounts
During the visit, Harry practised a fist-bump handshake and the couple donned headphones as presenter Gloria Beyi, 17, was on air. Markle is grateful to everyone who has followed her social media accounts over the years", a royal source told ABC News.

January 10, 2018
Xbox One Gets 'Do Not Disturb' Feature
We are investigating the inaccurate RGB colors that have been reported when displaying in 4K HDR mode when playing a UHD disc. Apparently, Microsoft is looking to update Xbox Achievements with a new "Careers" system and other special Avatar bonuses.

January 10, 2018
NAACP plans Martin Luther King Day events
Volunteers will meet at Edwards Waters College on January 15 for refreshments and a rally before venturing out to their projects. Hammond, who has participated in numerous BRLC programs, reads from Martin Luther King Jr.'s "I Have a Dream" speech.

January 10, 2018
Hands-on with the Lenovo Mirage Solo and Camera with Daydream
Like other VR180 cameras, content can be uploaded directly to Google Photos or YouTube to be viewed with or without a VR headset . The display is a 5.5-inch 75Hz 1440p LCD with a 110-degree field of view, and the device contains a 4,000mAh battery.

January 10, 2018
Margot Robbie to attend Australian Premiere of I, Tonya
After a moment of shock, Tonya responded. "I did find out after the fact". You can catch I, Tonya across Australian cinemas on 25th January 2018.