China: 'We will not halt United States bond purchases'

China: 'We will not halt United States bond purchases'

The treasury yields (return on investment) rise when bond prices fall, and so when the markets took a tumble on Wednesday, the yields moved to their highest level since March 15 past year, marking a 2.597 per cent return.

But why does China hold so much U.S. debt?

China's foreign exchange reserves, the world's largest, rose US$129.4 billion in 2017 to US$3.14 trillion, as tight regulations and a strong yuan continued to discourage capital outflows, data from China's central bank showed. It said investments in Treasuries are decided by market conditions.

"The dollar may fall to around ¥110" in the days to come, the official said. "I don't think that's worked out so poorly for the U.S".

Bloomberg reported that Chinese authorities were considering slowing or stopping the purchase of US Treasury debt, but China shot it down as "fake news".

President Donald Trump's administration is reportedly planning new tariffs, aimed at countering China's allegedly unfair trade practices.

The country is also the biggest foreign holder of United States government debt, with US$1.19 trillion in Treasuries as of October 2017, according to data from the Treasury Department.

All told, the three central banks are sitting on $14 trillion in securities they have bought since 2009: a $4.4 trillion mix of Treasuries and mortgage securities held by the Federal Reserve; the European Central Bank's $5 trillion in corporate and government bonds; and $4.5 trillion worth of bonds and exchange traded funds accumulated by the Bank of Japan.

The stakes may be higher now as tensions with the US have been building since the election of President Donald Trump, who's been critical of the American trade deficit with China and other countries.

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. The consensus among analysts surveyed by Bloomberg is for little change in the yuan by the end of 2018, from its current level of around 6.50 per dollar.

Not only would such a step hurt China by decreasing the value of its bond holdings, it would wreak havoc in a global economy that the country is now fully integrated into through deep trade and financial links.

"If China ceases to be a net purchaser of US Treasuries, this is unlikely to have a significant impact on the overall yield curve unless China divests a large share of its total holdings in a short time period", said Rajiv Biswas, Singaporebased chief Asia-Pacific economist at IHS Markit.

US Treasuries later pared some of their losses and the 10-year yield stood at 2.555 per cent in early Asian trade.

The yen has risen this week after the Bank of Japan on Tuesday trimmed its buying of long-dated Japanese government bonds in market operations.

Related News:

  • Magnetar Financial LLC Buys New Holdings in Kimberly Clark Corp (KMB)

    Iowa State Bank holds 1.33% of its portfolio in Kimberly-Clark Corporation (NYSE:KMB) for 23,928 shares. (NASDAQ:TRNS). Hsbc Holding Public Limited Company reported 611,898 shares stake. 26,840 are held by Orleans Cap Management Corp La.
    We Have Not Reached A Deal, Senator Flake Lied To The Media

    We Have Not Reached A Deal, Senator Flake Lied To The Media

    Trump rejected the plan, reportedly saying "Why do we want all these people from shithole countries coming here?" In a speech announcing his candidacy, he said he would "build a great, great wall on our Southern border".

    You fight for fantastic opportunities - Mourinho hints at Sanchez move

    Both Manchester clubs have reportedly shown interest and Conte feels he will be a good investment for whoever gets his signature. Do YOU want to write for GiveMeSport? "I've never questioned his commitment or attitude".
  • Hina Khan vs Shilpa Shinde vs Vikas Gupta

    Hina Khan vs Shilpa Shinde vs Vikas Gupta

    Hina Khan , Shilpa Shinde , Vikas Gupta , and Puneesh Sharma were present in the top four contestants of the season. This is a disappointing news for Vikas Gupta fans, as the "lost boy" is longer in the race to win the reality show.
    Caltrans: Hwy. 101 will remain closed indefinitely

    Caltrans: Hwy. 101 will remain closed indefinitely

    Heavy rain and a "deep rumbling" sound preceded the massive amounts of mud that blanketed miles and killed at least 17 people. She said: "It's not just a wealthy community, it's filled with a lot of different types of people from all backgrounds".
    Bipartisan US Senate immigration plan draws quick opposition

    Bipartisan US Senate immigration plan draws quick opposition

    A federal judge temporarily blocked President Trump's order ending the DACA program, Tuesday night. DETROW: Now they say they're working on building support for the deal in Congress.
  • Cleveland Cavs Willing To Trade Tristan Thompson

    Defensively, we're executing the things we want to do, whether it's switching, handling pick-and-rolls and just being efficient". The Cavs rank 29th in defensive rating, giving up 109.5 points per 100 possessions, better only than the 13-28 Sacramento Kings.
    Advanced Micro Devices Inc. (AMD) SVP Sells $226800.00 in Stock

    Advanced Micro Devices Inc. (AMD) SVP Sells $226800.00 in Stock

    Criterion Capital Management Llc sold 1.18 million shares as the company's stock declined 13.10% while stock markets rallied. During the last 52 weeks, the price has been as high as $15.65 and as low as $9.42. (NASDAQ: AMD ) on Thursday, August 3.

    Chevron (CVX) PT Set at $110.00 by Royal Bank of Canada

    After $1.03 actual EPS reported by Chevron Corporation for the previous quarter, Wall Street now forecasts 15.53% EPS growth. Cowen reissued a "buy" rating and set a $122.00 price objective on shares of Chevron in a report on Tuesday, September 19th.
  • Chipotle Mexican Grill Inc (NYSE:CMG) Institutional Investor Sentiment Trend

    It worsened, as 95 investors sold CMG shares while 157 reduced holdings. 43 funds opened positions while 132 raised stakes. The firm earned "Sector Perform" rating on Friday, August 12 by Scotia Capital. (TSE:SIA) rating on Thursday, November 10.
    Judd praises Franco for response to sexual misconduct claims

    Judd praises Franco for response to sexual misconduct claims

    The two had been having a consensual relationship, but they'd never engaged in oral sex before he exposed himself, she said. Four of the women were students in Franco's acting classes and one is a filmmaker who considered him a mentor.

    Oprah mocked for close ties with Weinstein following potential 2020 bid

    Anyone who showed up to an awards show probably ended up in a picture with Weinstein. Winfrey addressed the allegations against Weinstein in a Facebook post last October.


Most liked

UKIP leader's girlfriend suspended for racist comments about Meghan Markle
Senior party officials are to discuss the leader's private life at a crunch meeting over his future later this month. On Sunday he was accused on Twitter of being in Ms Marney's company when he appeared on television in mid-October.

Warm temperatures Sunday followed by snow on Monday
Clouds linger through Saturday morning and then we will see late day sunshine and temperatures rising into the middle 30s. I say "nearly" though because light breezes and partly cloudy skies should prevent temperatures from really dive-bombing.

British Government advises Israel, Palestine to share Jerusalem as capital city
The Arab world, said the King, can not sit idly by while Jerusalem and its holy places become captives of Israeli designs.

Hot Stock to Watch: The Blackstone Group LP (NYSE:BX)
The hedge funds in our partner's database now hold: 272.94 million shares, down from 283.35 million shares in 2017Q2. It gives investors a clue on how effective the company is in converting the money it has to invest into net income.

Pacers stay perfect against Cavs, comeback to win 97-95
LeBron James did not sound too anxious about the Cavs' struggles recently, but he also said that the team got to find a way out. That's a small frontcourt by National Basketball Association standards, but Stephenson was physical enough to make it work.

Trump says USA sold Norway non-existent F-52 fighter jets
Durbin said "shitholes" was "the exact word used by the president not just once but repeatedly". "We need the wall for security". Trump seems to be defending himself against the furor over his vulgar words to describe African countries.

Kane breaks Sheringham´s Premier League record for Spurs
When David Moyes took over as West Ham manager many observers questioned his ability to get the team scoring again. Tottenham Hotspur proved too strong for Everton as they romped to a 4-0 win at Wembley Stadium on Saturday night.

Lakers Could Have Interest In David Fizdale
But the chief distributor on the night was Lonzo Ball, who had 18 points and all six of his assists in the half court. I like the direction that they are going. "I've got my little man here, got my wife here, my family".

Threat of nuclear pact changes draws ire of Iran
The US also declared sanctions against 14 entities and people, including Iran's head of judiciary Ayatollah Sadeq Larijani. United Nations inspectors have certified Iran's compliance with the deal nine times, most recently in November.

Leicester boss says Chelsea looked exhausted
Leicester dominated the first half, with Jamie Vardy and Riyad Mahrez on scintillating form this afternoon at Stamford Bridge. The Italian won the Premier League title last term, in his first season as boss of the Blues, who play Leicester on Saturday.

Outrage over Trump slur on 'shithole' countries
Tom Cotton, R-Ark., and David Perdue, R-Ga. - said Friday that they " do not recall " Trump "saying these comments specifically". Trump has denied being racist, labeling himself the "least racist person there is" during his 2016 campaign.

Fort Wayne schools do well in 2017 high school graduation rates
EACS was down similarly in 2017, with a graduation rate of 91.36 percent at its high schools and non-waiver rate of 81.11 percent. While Hoosier graduation rates have remained stagnant over the past six years, state education policy has been in upheaval.

Makar Sankranti 2018: Interesting facts about India's Harvest Festival and Puja timings
And PM Narendra Modi extended his greetings to the people on the occasion of Makar Sakranti, Pongal, Magh Bihu and Uttarayan. Music by Ismail Darbar, the song has a handsome classic touch which helps you to celebrate the festival traditionally.

There's Already A Ridiculous $550+ Limited Edition For Dark Souls Remastered
Dark Souls Remastered has been announced for Nintendo Switch in a new Nintendo Direct Mini livestream that is going on right now. However, the Twitter user notes that even if the game is being remastered for PS4, don't expect details to be revealed soon.

Minnesota's Newest Senator Tina Smith Makes First Stop in Duluth
Saturday, Smith will also be making a number of appearances in the area, including on the Iron Range. Smith says she's being realistic about what she can accomplish here on Capitol Hill.