Investors remain skeptical that Beijing will retaliate against the U.S.’s tariffs by selling its stockpile of Treasurys.
Amid an escalating, tit-for-tat trade battle, some investors fret China could be tempted to sell a large chunk of its stockpile of Treasurys in a bid to raise U.S. government’s borrowing costs when Washington is contending with trillion dollar annual deficits.Hu Xijin, the editor in chief of Chinese state-owned newspaper The Global Times, tweeted on Monday that Chinese scholars had discussed selling the country’s stockpile of Treasurys as one potential option to retaliate against the U.S.
More recent, rumors abounded that the lackluster showing in last week’s Treasury auctions to fund the U.S. government over the next two quarters may have been due to China, the U.S.’s biggest creditor, curtailing its purchases of debt, said market participants. An escalation of trade tensions and the increased headwinds they would present to a rebound in global growth would prompt investors to take shelter in haven assets such as U.S. government paper. A heightening of trade tensions would thus offset any move by Beijing to pressure U.S. borrowing costs higher.
China has sold a sizable portion of its Treasury stockpile back in 2015-2016, when domestic growth was slowing and raising concerns around the health of the global economy. Self-defeating tactic Even if paring back its presence in the Treasurys market lifts U.S. borrowing costs, the retaliatory move would also erode the value of the mainstay of China’s foreign reserves. Guy LeBas, a fixed-income strategist at Janney Montgomery Scott, argued such a move would be akin to cutting off one’s nose to spite the face:
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
China 'will not participate' in Trump's proposed three-way nuclear talksChina won't take part in three-way nuclear talks with the United States and Russia, a government spokesman said Monday, potentially scuttling plans by the Trump administration for a grand nuclear deal between the three nations.
Lire la suite »
China says Iran nuclear deal should be fully implementedChina's foreign ministry said on Wednesday the 2015 Iran nuclear agreement ...
Lire la suite »
Asia Pacific markets set to slip as investors watch for US-China trade developmentsStocks in Asia Pacific were poised to decline at the open on Thursday as investors continue to monitor developments on the U.S.-China trade front.
Lire la suite »
Treasury yields tick higher as investors monitor US-China trade standoffU.S. government debt prices were lower on Wednesday morning, as investors monitored developments in U.S.-China trade talks.
Lire la suite »
Treasury yields tick lower as investors monitor US-China tradeU.S. government debt prices were higher on Tuesday morning, as investors monitored developments in U.S.-China trade.
Lire la suite »
Treasury yields tick higher as investors monitor US-China tradeU.S. government debt prices were higher on Thursday morning, on the back of growing tensions between the U.S. and China.
Lire la suite »
China Investors Need To Stick To Their GunsChina investors need to be very patient and try to ignore the headline risk coming from this week's trade talks in Washington
Lire la suite »
China shares, yuan rise as investors look past U.S. tariff hikeChinese shares and the yuan strengthened on Friday after the U.S. imposed higher...
Lire la suite »
Apple shares suffer worst week of 2019 as investors fear China trade turmoil threatens iPhone growthApple shares have slid steadily amid tumultuous U.S. trade negotiations with China, as investors fear CEO Tim Cook's warning earlier this year about iPhone sales in China may yet come true.
Lire la suite »