Quick Take: Chinese Regulator Denies Curbing US Treasury Purchases


That spooked investors anxious that sharp swings in China's massive holdings of US Treasuries would trigger a selloff in bond and equity markets globally. However, we believe USA inflation pressures are picking up.

"It's certainly more of a hawkish tilt in the minutes", said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.

Beijing keeps a big share of its $3.1 trillion in foreign currency reserves in US Treasury debt, which is considered safe and easy to trade.

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

But others said short sellers were squeezed out by the sudden downshift in yields prompted them to buy back, or "covering", the securities they had borrowed, juicing the late day rally.

There is no new agreement between Spain, Netherlands on British departure
Combined with slowing wage growth, households are beginning to feel the squeeze as their disposable incomes start to fall. The currency had been trading at about $1.50 before the result of the referendum became clear.

The State Administration of Foreign Exchange (SAFE) said on Thursday that the Bloomberg report had "cited a wrong source, or could be fake news". "I don't think we're headed for investment Armageddon".

For China, the market for USA government bonds is becoming less attractive relative to other assets, and trade tensions with the US may provide a reason to slow or stop buying American debt, said people familiar with the matter, who asked not to be named as they aren't allowed to discuss the matter publicly. In short, the USA government sells investors their debt at a preferential rate for them, and as part of a risk-free investment for the buyer, in this case, the Chinese government.

China had $1.19 trillion in Treasuries as of October 2017, data from the Treasury Department show. It isn't clear whether the recommendations of the officials have been adopted, Livemint reported.

Economists say they expect China to continue to adjust its holdings of US government debt, considered to be the most liquid dollar assets, but few believe dumping US Treasuries is among policy choices to be considered by top leaders. "We don't rule out the possibility that Beijing will seek to increase yuan flexibility, but the shift in policy will likely be modest and highly dependent on market conditions".

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.

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We will not accept such insults, even from a leader of a friendly country, no matter how powerful. She said the United States also faced difficulties, like unemployment and inequality.

In the eyes of some, Chinese officials may be trying to send a message that they have leverage with President Trump talking tough on trade.

Dollars under pressure Vs JPY after the Bank of Japan (BOJ) moved to trim its long-dated government bond purchases this week, was on track to post its biggest 1-day drop Vs JPY in 7 weeks.

China wants its own currency, the yuan, pegged to the dollar.

Its rise came amid a glut of bond supply from the United States, the UK, Japan and Germany, and a surprise cut in purchases of long-dated Japanese government bonds by the Bank of Japan (BoJ).

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How well it is working won't be known until next month but it's expected to be better than the 10 percent Australia reported. The vaccine was 48 percent effective in 2016-17 and 59 percent effective in 2015-16, according to the federal CDC.