Business

China May Stop Buying US Treasuries

China May Stop Buying US Treasuries

Bloomberg News reported that officials reviewing China s foreign-exchange holdings have recommended slowing or halting purchases of US Treasuries, citing people familiar with the matter.

There was big, big bad news on Wednesday.

Bond yields move inversely to prices.

China holds the world's largest foreign-exchange reserves, at US$3.1 trillion, and regularly assesses its strategy for investing them.

"If China was to reduce their involvement in buying USA government debt, it would have a significant impact on interest rates, which is why I think we're seeing our banks lead the market lower today", said Christopher Conway, head of research and trading at Australian Stock Report.

Unnamed officials told Bloomberg that China may reconsider its purchasing of US debt as trade tensions brew between the two countries. "And when you get another story like China, a major holder of U.S. Treasuries possibly stepping back from the market, it adds to the overall bearish trend in the Treasury market".

"Would the Chinese risk losing their investments in the USA market to make a political statement, particularly when their holdings are most likely targeted for broader investments in the US?" says Quincy Krosby, chief market strategist at Prudential Financial. The People's Bank of China could also not be reached for comment outside business hours. Some economists and China followers believe the report, which cited people familiar with the matter, could have been intended as a warning shot to the United States administration.

More news: No, Mark Wahlberg Didn't Get Paid More Because He's a Man
More news: Kanye West rapped on the phone for dying young fan
More news: Gwyneth Paltrow Finally Admits She's Engaged to Brad Falchuk

The China report weakened the U.S. dollar, which slipped 0.25 per cent, while gold jumped to its highest in four months. That pushed the Japanese yen higher against the USA dollar, denting some exporters' shares.

China's central bank liquidated a record amount of US government bonds in 2016 to stabilize its currency.

The 2-year yield climbed as high as 1.985 percent, its highest level since Sep.

Despite Trump's tough rhetoric, little progress has been made on aluminum and steel tariffs.

The report comes amid increasing nervousness about bond weakness after the Bank of Japan said on Tuesday it will trim its purchases of Japanese government bonds, raising speculation it will reduce its monetary stimulus this year.

"The US treasury market is a deeply robust market within the world (and) with our economy strengthening it will remain a deeply robust market", US Under Secretary of the Treasury David Malpass said during a visit to Brussels.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.


  • Natural disaster  in Caribbean prompts tsunami warning; no deaths reported

    Natural disaster in Caribbean prompts tsunami warning; no deaths reported

    President Juan Orlando Hernandez tweeted that the emergency system had been activated and people should remain calm. Virgin Islands after the natural disaster and warned of possible waves up to 1 meter (3 feet) above tide level.
    Giants to hire Matt Patricia as head coach?

    Giants to hire Matt Patricia as head coach?

    Leonard suggests Patricia could hire Alabama offensive coordinator Brian Daboll due to their time spent together in New England. Many believed he'd be headed to the Lions , but it has since been reported that he favors the Giants over the other two teams.
    'Black Panther' presale tickets set Marvel record

    'Black Panther' presale tickets set Marvel record

    Yes, in its first day of ticket presales, Black Panther has toppled Civil War for the No. 1 spot among MCU films. " Black Panther " arrives in theaters February 16.
  • Packers to name ex-Browns coach Mike Pettine defensive coordinator

    Packers to name ex-Browns coach Mike Pettine defensive coordinator

    The Packers will interview Mike Pettine for their vacant defensive coordinator job, Adam Schefter of ESPN reports. It was the first time in almost 30 years that the Browns held first place in any division that late into a season.
    PUBG New Update Adds Two New Crates, Report Cheaters Function

    PUBG New Update Adds Two New Crates, Report Cheaters Function

    Another big new feature of the update is the replay report tool, which allows you to tag cheaters from the replay screen. The game has already come out of Early Access on Steam , but there is clearly a lot of work to do on both platforms.
    Bears name Chiefs assistant Nagy as new coach

    Bears name Chiefs assistant Nagy as new coach

    The Bears are the first team to fill a head-coaching vacancy this offseason, moving swiftly in the process. These are exciting times for Bears fans, and the hope is that Nagy is the coach that Pace thinks he is.
  • Trumps says world laughing at 'stupidity' of Russian Federation  collusion probe

    Trumps says world laughing at 'stupidity' of Russian Federation collusion probe

    Asked in recent press conference whether he would do an interview with Mr Mueller, the President quickly switched topics. Any deal on immigration "has to include the wall" Trump said Wednesday, "because without the wall, it all doesn't work".
    National Hockey League  announces 2018 All-Star rosters

    National Hockey League announces 2018 All-Star rosters

    Sticking with the format used past year , the All-Star Game will played in a 3-on-3 style tournament with four different teams. Staal, who is in his 15th NHL season, will represent the Minnesota Wild at the NHL All-Star game in Tampa Bay.
    Is reshuffle enough to revive May's fortunes?

    Is reshuffle enough to revive May's fortunes?

    However this will only happen if Ministers focus more on policy and delivery, and less so on personalities and rivalries. British Prime Minister Theresa May arrives at 10 Downing Street ahead of the reshuffle of her Cabinet.
  • Apple says it will introduce new features to help parents protect children

    Apple says it will introduce new features to help parents protect children

    The company also says, however, that it has "new features and enhancements" planned for the future to improve parental controls. The investors want Apple out front in attempting to learn what is optimal usage and in simplifying parental controls.
    Serena Williams opens up about postpartum health complications

    Serena Williams opens up about postpartum health complications

    Williams also revealed that she tries not to look at her sister Venus Williams's face when the two are playing against each other. Thankfully, Serena has since recovered and is now enjoying life with her new husband and their handsome bundle of joy.
    SpaceX says top secret spy satellite disappearing not their fault

    SpaceX says top secret spy satellite disappearing not their fault

    After an extensive Air Force review, SpaceX was certified in 2015 to compete for military launches. Last March, a Falcon 9 was relaunched into space-the first time an orbital rocket was reused.