Monday’s negotiation session will be one of the most volatile from the Covid accident in March 2020, with the global markets trapped in crossfire when the United States and China face rates and no superpower shows any impulse to go back.
As the variable rental markets staggered, volatility was extended in each kind of assets. Bitcoin (BTC), for example, balanced up to 10% intradic. The real approach, however, is in the 10 -year Treasury performance.
The yield fell to 3.9% from 4.8% at the end of last week after President Donald Trump reinforced commercial tensions with large import tariffs, which increases the demand for treasure notes.
Bond prices generally increase, sending lower yields, when Wall Street becomes reluctant to risk. Unusually, as risk aversion increased on Monday, yields increased, jumping to 4.22%.
This peak was not limited to the US. The United Kingdom experienced its most acute tariff jump from the pension crisis of the Era of Liz Truss in October 2022, and the yields increased worldwide, pointing out a growing instability and decreased confidence in sovereign debts and currencies.
Ole s Hansen, the head of basic products strategy in Saxobank, pointed out the move of moving in the long -standing treasure bonds as a sign of something deeper that develops potentially.
“The United States Treasury Bonds suffered a massive sale of a mass sale yesterday, with long yields that increase to the maximum from turbulence during the pandemic out As of 4.65% yesterday, yesterday, the 10 -year -old benchmark, increased the 30 -year benchmark from the low of the low of 4.30% to the high one as of 4.65% yesterday of yesterday, yesterday, the bench of the 10 years, yesterday, the 30 -year -old benchmark, increased from the height of 4.30% to the high 10 years, yesterday.
While Hansen pointed out the fingers in the foreign sale, especially China, which is said to downloaded $ 50 billion in Treasury bonds, Jim Bianco, president of Bianco Research, challenged that narrative.
“No, foreigners did not sell treasure bonds to punish the United States (Trump),” he wrote, inspecting a strong demonstration in the dollar index (DXY), which rose 2.2% in just three days.
“If China or other foreigners sold treasure bonds … they would have to convert those dollars to a foreign currency. Otherwise, selling treasury bonds and leaving money in dollars in an American bank makes no sense. If they sold enough treasures to balancing yields … the subsequent sale of dollars … would have reduced the dollar. Instead, it became more than usual.
“This suggests that foreign money was moving to the United States, not far from it … the sale was more domestic and more concerned about inflation.”
Despite these points of view, unconfirmed reports on China’s sales continue to circulate. As of January 2025, China still had approximately $ 761 billion in debt of the United States government, the largest owner after Japan.
The narration that 10 and 30 years yields increased in the Chinese is not convincing because most of the official Chinese investments in assets called dollars are not in instruments of longer duration, but agency bonds, short -term invoices and bank deposits.
There is a perception that China can obtain influence on the commercial war through its US treasure notes. That is not necessarily true.
As the economist and author of “The Great Rebalancing: Commerce, conflict and the dangerous way ahead for the world economy” has argued Michael Pettis, China’s holdings from the United States Treasury bonds are directly linked to their current account surplus and cannot put these holdings against the United States.
It is not surprising that China has been lightening its treasure investments since 2013 with its reach of current account surplus during the 2008 accident.
