American treasury bonds: What happened and why

During the past week, the American Treasury Market witnessed investors of safe haven, in an extraordinary step added to the turmoil in the market caused by US President Donald Trump’s “mutual” tariff – forcing him to suspend duties.

In only a few sessions, the return on the cabinet increased for 10 years to 4.592 % on Friday, the highest since February. Likewise, the Treasury bonds for 30 years He achieved its highest levels since November 2023 Last Wednesday. While the returns have decreased since then, they are still high.

The returns rose about 50 basis points in the five days until April 11, according to data from LSEG.

With fears of stagnation, the volatile markets were the sales process in the treasury is unusual, as investors in times of uncertainty in general tend to flow to the safety of American debt.

The unusual external flow raises the question: Who was selling – and why?

China is the second largest foreign creditor in America after Japan, It holds about 760 billion dollars in treasury bonds.

“I think China is actually reviewing the treasury it is already keeping,” said Chen Zhao, chief international strategic expert in the Alps.

“They are selling treasury bonds and converting returns to the euro or German packages. This is in fact very consistent with what has happened over the past two weeks,” he added. German shoes He had left a wider sale in the treasury bonds that took place last week, with its revenues slipping for 10 years.

However, others note that the sale of the cabinet will bite China a lot because it will harm the United States

Michael Betis said that the rapid sale will reduce the remaining bonds, which means China will bear losses for its own investments. The oldest Carnegie colleague in Beijing.

“China, which sells its share in the cabinet, will actually shoot itself,” said Michael Brown, the chief research strategy in Bebeston. The sale of China, which sells the cabinet, will require the capital again to Beijing and appreciate the yuan.

Brown told CNBC that this will be “an accurate opposite” of what Beijing is going, especially at a time when the government hopes to stimulate the local economy and pillow from customs duties.

It was also questioned in the role of Japan, the largest American debt holder. According to the head of the ruling party’s policy in the country He emphasized that Japan should not sell “on” the treasury’s possessions After the opposition legislator put forward the idea of ​​using the cabinet as a negotiating tool in bilateral commercial negotiations.

One analyst knows that Japan can be in reality the largest perpetrator in the sale of the treasury, instead of China.

“Japan is actually a bigger problem,” said Gary Evans of BCA Research. More specifically, life insurance companies in Japan.

“Everything is fine for the Japanese government, we will not sell treasury bonds for us, but it is not the Japanese government that owns it. It is Nippon’s life.”

If these insurance companies are concerned about selection in American policy and want to reduce exposure, there “the government cannot do.”

“Asia and the Pacific, the sale could also be fed through a group of European and Japanese pensions to buy European fixed income,” said Brashant Newha, TD.

These basis deals It works commonly through macro hedge boxes and includes borrowing funds to buy a treasury during the sale of future contracts related to these bonds with the aim of benefiting the differences in prices.

“Watch bonds” A title for investors who keep tabs on monetary or financial policies that may be amplified by avoiding or selling government debts, prepare the list of suspect sellers.

“The vigilance bonds have been hit again,” VirtueHe pointed out that the recent market movements were a sign that Trump’s policies were misleading.

In addition to the hedge funds that underestimate the positions, Bond Bond, which imposes their financial discipline and ensuring that all that Trump wants is most likely to be determined to sell the dead in UST, Newhaha.

Monthly Treasury data usually comes with delay, and the latest numbers issued in March are January. April data is scheduled Only in June. Given the sales scale and lack of clear and instant numbers, it is not easy to isolate certain limbs that lead them and to any degree, according to the market observers CNBC.

But submission to all guesses is a visualization of a decrease in confidence in American policies.

“Non -cohesive and flying nature” to make politics greatly avoids the cabinet as a safe haven.

America Facial policy With regard to definitions Cutting confidence in American assets This has weakened the US dollar, which is usually benefiting from investors looking for safe haven assets.

Nina said: “If the problems of confidence in the market with the American administration are deteriorating more, this may be the catalyst for sale on the next leg.”