Latest news with #BloombergUSTreasury
Mint
5 days ago
- Business
- Mint
Foreign Holdings of Treasuries Climbed to a Record High in June
(Bloomberg) -- Foreign investor holdings of Treasuries climbed to a record high in June, showcasing sustained overseas demand for US government debt even as a slump in the dollar stoked concerns about sentiment toward American assets. Foreign holdings totaled $9.13 trillion for June, up $80.2 billion from May, Treasury Department figures showed Friday. For the first half of the year, foreign holdings went up by $508.1 billion. That was during a period in which one benchmark gauge of the dollar tumbled by almost 11%, the most since 1973. Britain and Belgium saw the biggest gains in holdings, while India — currently embroiled in a trade battle with the Trump administration — and Ireland posted declines. China's stockpile was little changed. Holdings are affected by net sales or purchases along with shifts in valuation. The Bloomberg US Treasury index advanced in June, after a selloff the previous month. Japan, the biggest holder of Treasuries, saw a $12.6 billion rise in its holdings, to $1.15 trillion, while China's stockpile — now the third larges, behind the UK — ticked up $100 million $756.4 billion. Belgium, whose holdings include Chinese custodial accounts according to market analysts, saw its stockpile go up by $17.9 billion, to $433.4 billion. Britain's holdings jumped by $48.7 billion, the most since March 2023, to $858.1 billion. India's total dropped by $7.9 billion, to $227.4 billion. Overseas holdings of Treasuries have been in focus against a backdrop of concern about foreign demand after President Donald Trump slapped tariff increases on the rest of the world. Foreign funds and governments hold over 30% of US Treasuries outstanding. More stories like this are available on
Bloomberg
04-02-2025
- Business
- Bloomberg
Ceilings in 2025? $80 oil, $4 natural gas, $4.50 copper, $5 corn
Hedge funds defy Trump in commodities, elevating sell-stop risks Some combination of WTI crude oil staying above $80 a barrel, $4 per million British thermal unit natural gas, $4.50-a-pound copper and $5 corn may be needed for broad commodities to add to January's bounce. Managed money (hedge fund) net longs jumped in January along with futures open interest, indicating upside enthusiasm — and sell-stop risks. New year commodity exuberance may face price ceilings Are commodities breaking out higher or at elevated autocorrelation risk? This is a key question at the end of January, and our bias is the latter. Open interest in futures tracked by the Bloomberg Commodity Index has jumped about 8% in 2025, which is normal for the first month and indicates new longs, but speculator longs have risen more. At about 9% of open interest as of the latest data, hedge funds are the most bullish since 2Q23. Absent a supply shock, we see downward leanings, particularly if President Donald Trump gets his way in energy. WTI crude may have peaked around $80 a barrel, natural gas just above $4 per MMBtu, copper at about $4.50 a pound and corn approaching $5 a bushel. Macroeconomic prerequisites for rising commodities may include a higher US stock market, Bitcoin, weaker dollar and stronger China. Deflating bond yields counter commodity inflation Falling government bond yields are inconsistent with rising commodity prices. The downtrend in global yields, especially facing potential US tariffs, may place an inordinate burden on stocks and Bitcoin to keep rising to avoid deflation reciprocal to recent inflation. At about 120 bps less than the US Treasury 10-year, the average yields of the top five governments by GDP point to deteriorating demand-pull forces. Is the almost-5% January bounce in the Bloomberg Commodity Index suggesting reflation and higher bond yields, or is it a feint? Our hunch is the latter, notably if WTI crude oil has peaked around $80 a barrel. The graphic shows a reason for crude to breach cliff's-edge support at about $68 — plunging bond yields, led by China. Similar peak inklings in natural gas, copper and corn may portend an ebbing tide. What of commodities if stocks, Bitcoin decline? President Trump's shift to cryptocurrency enthusiast may put Bitcoin in the forefront of markets that need to keep going up in 2025 to avoid deflation, notably from China. That's emphasized by our annual performance scorecard showing the highly speculative and volatile digital asset stretched on the top and Bloomberg US Treasury 20+ index near the bottom, which may portend reversion potential. Lower energy prices and interest rates are stated goals of the president, which may solidify ceilings at about $80 a barrel crude and $4 per MMBtu natural gas. What's notable is gold's 37% gain year over year to Jan. 30 vs. only 25% for the S&P 500 total return. The metal beating stocks is not a good sign for global economic underpinnings. If Bitcoin backs up, it could buttress the old guard store of value. Gold may be gaining momentum, footings in 2025 The least-elastic precious metals on the top of our annual performance scorecard, and highly autocorrelated grains on the bottom, could have trend continuation inklings in 2025. Gold's roughly 55% gain vs. crude oil's almost 20% decline since the leaders of China and Russia announced their 'unlimited friendship' in February 2022 may emphasize geopolitical tensions favoring the precious metal. Absent President Xi Jinping shifting away from President Vladimir Putin and toward Donald Trump, we see gold continuing to rise, especially if the stock market and/or Bitcoin decline. Without a poor growing season, the grains may do what's normal and gravitate toward break-even costs, which for corn is about $3.75 a bushel. Industrial metals are vulnerable to China in decline as indicated by its plunging bond yields.
