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China’s Nuclear Option to Sell US Treasurys, Report 19 May
China’s Nuclear Option to Sell US Treasurys, Report 19 May There is a drumbeat pounding on a monetary issue, which is now rising into a crescendo. The issue is: China might sell its holdings of Treasury bonds—well over $1 trillion—and crash the Treasury bond market. Since the interest rate is inverse to the bond price, […]
Saudis Threaten To Ditch Petrodollar As “Nuclear Option” To Block NOPEC Bill
Saudis Threaten To Ditch Petrodollar As “Nuclear Option” To Block NOPEC Bill Three year ago – almost to the day – Saudi Arabia rattled its first sabre towards the United States, with an implicit threat to dump US Treasuries over Congress’ decision to allow the Saudis to be held responsible for the 9/11 attacks. In a stunning report at […]
Treasury Announces Record Debt Sale In Upcoming Refunding Auction
Treasury Announces Record Debt Sale In Upcoming Refunding Auction Treasury Secretary Steven Mnuchin is about to surpass Timothy Geithner’s achievement of selling a record amount of notes and bonds as he seeks to finance America’s soaring budget deficit. According to the latest quarterly refunding statement, the US Treasury is about to sell a record amount […]
China & Japan Dump Treasuries As Dollar’s Reserve Status Slumps To 5 Year Lows
China & Japan Dump Treasuries As Dollar’s Reserve Status Slumps To 5 Year Lows Treasury International Capital flows showed Brazil the biggest buyer of Treasurys in August (followed by Ireland and France), but it was China and ‘ally’ Japan that dumped the most Treasurys in the month… Brazil is Steve Mnuchin’s best friend… As China […]
US Treasury Issues More Bonds, But No One Wants Them
US Treasury Issues More Bonds, But No One Wants Them In an attempt to feed the soaring debt and spending habits of the United States government, the US Treasury is issuing more bonds. But they’ve run into a big problem: no one wants to buy those worthless bonds anymore. Debt is going to be a big problem […]
Amid Market Rout, Decade of “Financial Repression” Ends, Capital Preservation Suddenly is a Thing
Amid Market Rout, Decade of “Financial Repression” Ends, Capital Preservation Suddenly is a Thing This will dog the stock market going forward. Fixed-income investors – a financially conservative bunch buying Treasury securities, FDIC-insured CDs, and similar products that largely eliminate risk – have been getting crushed for a decade: Except for brief periods when inflation […]
“Monster Move” In Treasuries Unleashes Global Market Rout
“Monster Move” In Treasuries Unleashes Global Market Rout A sea of red has greeted stock traders across the world this morning after what one analyst called “monster moves” in U.S. Treasury yields. The bond rout that sent 10Y Treasury yields to the highest since May 2011 promoted by stronger than expected US economic data, and which […]
The Gathering Storm In The Treasury Market
The Gathering Storm In The Treasury Market Summary Our analysis provides kind of a Grand Unified Theory (GUT) of what is currently taking place in global financial markets The massive borrowing by the U.S. Treasury is crowding out emerging markets capital flows The structural factors that have kept long-term interest rates low and term premia repressed are fading […]
Mortgage Rates Head to 6%, 10-Year Yield to 4%, Yield Curve Fails to “Invert,” and Fed Keeps Hiking
Mortgage Rates Head to 6%, 10-Year Yield to 4%, Yield Curve Fails to “Invert,” and Fed Keeps Hiking Nightmare scenario for the markets? They just shrugged. But homebuyers haven’t done the math yet. There’s an interesting thing that just happened, which shows that the US Treasury 10-year yield is ready for the next leg up, […]
Did Russia Really Dump Its U.S. Debt?
DID RUSSIA REALLY DUMP ITS U.S. DEBT? Russia dumped 84% of its American debt,” blared a July CNN headline. Russian central-bank head Elvira Nabiullina said the sales were just part of “diversifying the entire structure of currencies.” But with the U.S. dollar accounting for two-thirds of global foreign-exchange reserves and most (non-intra-eurozone) international trade, dumping this much dollar debt […]
No Seller, Let Alone China, Can Disrupt US via Selling US Treasury’s…But the “Why” Ain’t Good
No Seller, Let Alone China, Can Disrupt US via Selling US Treasury’s…But the “Why” Ain’t Good I often read that China may retaliate against US trade sanctions by further decreasing their US Treasury holdings, sending Treasury yields significantly higher, thus blowing out US deficit spending on interest payments. Trouble is, Chinese Treasury holdings peaked in 2014 […]
Turkey Joins Russia In Liquidating US Treasuries
Turkey Joins Russia In Liquidating US Treasuries Last month, when we reported that Russia had liquidated the bulk of its US Treasury holdings in just two months, we said that “we can’t help but wonder – as the Yuan-denominated oil futures were launched, trade wars were threatened, and as more sanctions were unleashed on Russia […]
Russia Liquidates Its US Treasury Holdings
Russia Liquidates Its US Treasury Holdings Last month we showed that as Trade Wars began in April, the world’s central banks and other official institutions dumped more Treasuries than in any month since January 2016, some $48.3BN, perhaps over concerns of others selling first, and precipitating a sharp move higher in yields. Fast forward one […]
Trade End Game Scenarios: Boycott Treasuries vs Yuan Devaluation
Trade End Game Scenarios: Boycott Treasuries vs Yuan Devaluation Since there is no longer any reasonable debate about a trade war having started, let’s investigate how it ends. End Game Analysis The end-game retaliation comes via a global boycott of the Treasury auctions. Foreign entities fund half the US fiscal deficit, which is set to […]
Oil Surges, 10Y Yield Back Over 3%, Futures Jump In Iran Deal Fallout
Oil Surges, 10Y Yield Back Over 3%, Futures Jump In Iran Deal Fallout For those curious what the fallout from the US withdrawal from the Iranian nuclear deal looks like in the capital markets, the answer is as follows: higher US stock futures, a stronger dollar (at least initially, the greenback has since turned slightly […]
