Latest news with #GertrudeChavez-Dreyfuss
Yahoo
16-05-2025
- Business
- Yahoo
Foreign holdings of US Treasuries top $9 trillion in March, data shows
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) - Foreign holdings of U.S. Treasuries soared to a record high in March, data from the Treasury Department showed on Friday, rising for a third straight month, as demand for U.S. government debt remained robust a few months after President Donald Trump took office. Holdings of U.S. Treasuries surged to $9.05 trillion in March, an all-time peak and up more than $233 billion from $8.81 trillion in February. Compared with a year earlier, Treasuries owned by foreigners rose nearly 12%. Some analysts said that trend could change in April as the Trump administration introduced a massive trade shock on April 2nd that saw effective tariff rates surge, particularly on Chinese goods. That fueled a U.S. Treasuries sell-off that, at one point, pushed benchmark 10-year yields more than 70 basis points (bps) higher to nearly 4.6% over the April 3-11 period. The selloff may have included selling from foreign investors, analysts said. Trump has since paused the imposition of tariffs for 90 days, and the Treasuries market has stabilized somewhat, although foreign investors are likely to have remained leery of U.S. assets. Data also showed that UK investors have overtaken China as the second largest non-U.S. holder of Treasuries, with holdings of $779 billion. UK is typically considered a custodial account, which is generally a proxy for hedge funds. Other countries used by hedge funds for custody services include Cayman Islands and the Bahamas. Japan remains the biggest Treasury debt holder, with a stash of $1.13 trillion in March, up about 0.4% from the $1.126 trillion held in February. Japan's load of Treasuries rose for a second straight month. China, on the other hand, reduced its stash of Treasuries to $765.4 billion in March, down from $784.3 billion the previous month. In December last year, China's holdings were $759 billion, the lowest since February 2009 when the country's stock of Treasuries dropped to $744.2 billion. Treasury holdings by Chinese investors have been on a downward trajectory since 2018, analysts said. The benchmark 10-year Treasury yield started the month of March at 4.18% and ended it slightly higher at 4.425%. Major U.S. asset classes also showed a mix of inflows and outflows during the month, the data showed. On a transactional basis, holdings of Treasury bonds and notes showed a net inflow of $123 billion in March, following inflows of $106.2 billion in February. Foreign investors continued to buy U.S. corporates, with $60.4 billion in inflows, with agencies showing outflows of $10.4 billion, data showed. U.S. equities, meanwhile, posted inflows of $10.4 billion in March, down from $24.7 billion in the previous month. Overall, net foreign acquisitions of long- and short-term securities, including banking flows, showed a net outflow of $254.3 billion in March, up slightly from $248.9 billion posted in February. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
Foreign holdings of US Treasuries top $9 trillion in March, data shows
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) - Foreign holdings of U.S. Treasuries soared to a record high in March, data from the Treasury Department showed on Friday, rising for a third straight month, as demand for U.S. government debt remained robust a few months after President Donald Trump took office. Holdings of U.S. Treasuries surged to $9.05 trillion in March, an all-time peak and up more than $233 billion from $8.81 trillion in February. Compared with a year earlier, Treasuries owned by foreigners rose nearly 12%. Some analysts said that trend could change in April as the Trump administration introduced a massive trade shock on April 2nd that saw effective tariff rates surge, particularly on Chinese goods. That fueled a U.S. Treasuries sell-off that, at one point, pushed benchmark 10-year yields more than 70 basis points (bps) higher to nearly 4.6% over the April 3-11 period. The selloff may have included selling from foreign investors, analysts said. Trump has since paused the imposition of tariffs for 90 days, and the Treasuries market has stabilized somewhat, although foreign investors are likely to have remained leery of U.S. assets. Data also showed that UK investors have overtaken China as the second largest non-U.S. holder of Treasuries, with holdings of $779 billion. UK is typically considered a custodial account, which is generally a proxy for hedge funds. Other countries used by hedge funds for custody services include Cayman Islands and the Bahamas. Japan remains the biggest Treasury debt holder, with a stash of $1.13 trillion in March, up about 0.4% from the $1.126 trillion held in February. Japan's load of Treasuries rose for a second straight month. China, on the other hand, reduced its stash of Treasuries to $765.4 billion in March, down from $784.3 billion the previous month. In December last year, China's holdings were $759 billion, the lowest since February 2009 when the country's stock of Treasuries dropped to $744.2 billion. Treasury holdings by Chinese investors have been on a downward trajectory since 2018, analysts said. The benchmark 10-year Treasury yield started the month of March at 4.18% and ended it slightly higher at 4.425%. Major U.S. asset classes also showed a mix of inflows and outflows during the month, the data showed. On a transactional basis, holdings of Treasury bonds and notes showed a net inflow of $123 billion in March, following inflows of $106.2 billion in February. Foreign investors continued to buy U.S. corporates, with $60.4 billion in inflows, with agencies showing outflows of $10.4 billion, data showed. U.S. equities, meanwhile, posted inflows of $10.4 billion in March, down from $24.7 billion in the previous month. Overall, net foreign acquisitions of long- and short-term securities, including banking flows, showed a net outflow of $254.3 billion in March, up slightly from $248.9 billion posted in February.
Mint
09-05-2025
- Business
- Mint
US yields little changed as China trade talks loom
China talks front and center on bond investors' radar Trump says 80% tariffs on China imports seem right Fed fund futures lower odds of July easing By Gertrude Chavez-Dreyfuss NEW YORK, - U.S. Treasury yields were flat overall on Friday, with thinner volume than usual and sentiment still uncertain, as investors looked ahead to talks between the Trump administration and China over the weekend in Geneva on tariffs. Market participants said there was a bit of short-covering that went on in Treasuries following a selloff on Thursday that pushed yields to multi-week highs, amid a U.S.-UK trade deal. That deal was the first since President Donald Trump imposed worldwide tariffs on April 2, sparking a rally in U.S. equities, and the dollar. It also helped pushed Treasury prices lower and yields higher, as investors looked to take on more risk. Trump said more deals are set to follow the UK trade pact. Switzerland is also among the countries seeking to strike a quick deal to reduce those tariffs, and Swiss President Karin Keller-Sutter said it was towards the front of the line after "positive" discussions. "The tail risk that we're not going to budge on any of the big numbers from April 2nd is now easing. That is what the market is finding solace in, even though there is no full clarity," said Vishal Khanduja, head of broad markets fixed income at Morgan Stanley Investment Management in Boston. "Hopefully these small treaties that we are coming up with will give more clarity not only for other nations, but also the market, like what is the starting point and the ending point for these tariffs." Ahead of the China negotiations, Trump said on Friday that an 80% tariff on Chinese goods "seems right," making his first suggestion of a specific alternative to the 145% levies he has imposed on China. U.S. stock futures briefly dipped earlier after the Trump news, while the 10-year yield slipped. Wall Street shares were last little changed to slightly lower on the day in the run-up to the China meeting. The U.S. president's comments did not match earlier speculation, reported by Bloomberg, that Treasury Secretary Scott Bessent, who is heading the U.S. delegation, and his group have set a target of reducing tariffs below 60% as a first step. Mike Venuto, co-founder and chief investment officer at Tidal Financial Group in New York, was not optimistic about the upcoming China talks. "It will take more time than we want to. I would expect further uncertainty because trade deals even when you have good partners which are working in good faith will take a year to work out," he said. "What we have seen so far is simply symbolic. There's a lot of wood to chop. People are just looking for any piece of good news that is more or less sustainable." In afternoon trading, the benchmark 10-year yield was last flat on the day at 4.374%, but rose 5.6 basis points on the week overall for a second straight week of gains. On Thursday, following the UK trade deal, the yield hit a two-week high. U.S. 30-year yields, meanwhile, were also little changed at 4.833%, but climbing 4.3 bps this week, also posting its second consecutive week of gains. On the front end of the curve, the two-year yield , which reflects interest rate expectations, slipped 1 basis point to 3.885 after hitting a three-week peak on Thursday. On the week, the yield advanced 4.5 bps, rising for two straight weeks as well. Federal Reserve speakers on Friday, meanwhile, did not say anything earth-shattering, indicating that policy remains on hold for the foreseeable future given tariff uncertainty. Following the UK trade agreement, the benchmark federal funds futures market has lowered the odds of a rate cut at the July 29-30 policy meeting to 60%, from around 70% on Wednesday, according to LSEG calculations. It also sees about 68 bps of easing this year, down from 82 bps on Wednesday. This article was generated from an automated news agency feed without modifications to text.
Yahoo
05-05-2025
- Business
- Yahoo
Bond investors stick to neutral stance ahead of Fed meeting
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) -Bond investors have taken a neutral stance in the run-up to the Federal Reserve's two-day monetary policy meeting this week, reflecting continued caution over U.S. trade policy that threatens to plunge the world's largest economy into recession. Fixed-income investors said they are either staying neutral relative to their benchmarks, reducing their long-duration exposure, or preferring to remain on the shorter end of the yield curve. "We are sort of in this uneasy equilibrium between growing economic concerns as we see soft data sour a bit, but also the potential for policy shocks that could impact inflation outlooks and the deficit," said Chip Hughey, managing director of fixed income at Truist Advisory Services in Richmond, Virginia. To be neutral means sticking to a portfolio's duration benchmark. For instance, if the benchmark duration is five years, a neutral position would suggest staying in fixed-income assets with five-year maturities or around that vicinity. Duration, which is expressed in number of years, provides an indication on how far the bond's value will fall or rise when interest rates move. In general, when rates fall, higher-duration bonds experience a greater increase in value compared to those with lower duration. Investors extended duration for most of 2024, believing at the time that the Fed would embark on a deep rate-cutting cycle. Long-duration bets typically involve buying longer-dated assets on expectations of a decline in yields. On Wednesday, the U.S. central bank's policy-setting Federal Open Market Committee is widely anticipated to keep its benchmark overnight interest rate in the 4.25%-4.50% range. Stronger-than-expected U.S. nonfarm payrolls data for April last Friday also gave the Fed some leeway to keep rates unchanged. Since the Fed's last meeting in March, President Donald Trump's administration has introduced a massive trade shock that saw effective tariff rates surge, particularly on Chinese goods. That fueled a U.S. Treasuries sell-off that, at one point, pushed benchmark 10-year yields more than 70 basis points (bps) higher to nearly 4.6% over the April 3-11 period. The U.S. 10-year yield is currently at 4.357%. In his post-meeting press conference on Wednesday, Fed Chair Jerome Powell is likely to indicate that Trump's tariff shock could lead to higher inflation and an increase in unemployment, with recession not a far-fetched scenario. NO PRE-EMPTIVE MOVE "The Fed is unlikely to act pre-emptively given its expectation that inflation will be firming and the size of the tariff shock could produce persistent inflation effects," Morgan Stanley analysts led by chief U.S. economist Michael Gapen wrote in a research note. Trump has walked back some of the U.S. tariffs since his self-declared "Liberation Day" on April 2, partly stabilizing bond and stock markets. But overall market anxiety over what will happen next has not dissipated, investors said. "We're telling investors to continue to be cautious and de- risk," said Gregory Peters, co-chief investment officer at PGIM Fixed Income, which has assets under management of $837 billion. "The way I see the tail is that there's only one side of the distribution: I don't see the upside tail. I think there's more of a centering around, from a yield-curve perspective, on the front end because at least that's driven by Fed policy," he said referring to his expectation that the economy will struggle with the Trump administration's tariff policy. He added that the back end, specifically 30-year bonds, are "driven by factors that are well beyond my control and understanding." The market, however, does not expect the Fed to leave rates unchanged much longer. The benchmark federal funds futures market has priced in a nearly 80% chance that the U.S. central bank will resume its rate cuts at its July 29-30 policy meeting, according to LSEG calculations. All told, the market expects about 77 basis points of easing this year. J.P. Morgan's latest Treasury client survey showed that 64% of the U.S. bank's clients are neutral, and 24% are net long overall. That net long position on Treasuries was down from a peak of 32% in the week of April 7, according to Jay Barry, head of global rates strategy at J.P. Morgan. "We're currently neutral, leaning more on the front end of the curve where we have a little bit of comfort that it will be anchored toward Fed cuts going forward," said Anders Persson, chief investment officer and head of global fixed income at Nuveen in Charlotte, North Carolina. "That's recognizing that given all the policy uncertainty, the backdrop of not a whole lot of clarity, that we're not all that comfortable making big bets."
Yahoo
05-05-2025
- Business
- Yahoo
Bond investors stick to neutral stance ahead of Fed meeting
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) -Bond investors have taken a neutral stance in the run-up to the Federal Reserve's two-day monetary policy meeting this week, reflecting continued caution over U.S. trade policy that threatens to plunge the world's largest economy into recession. Fixed-income investors said they are either staying neutral relative to their benchmarks, reducing their long-duration exposure, or preferring to remain on the shorter end of the yield curve. "We are sort of in this uneasy equilibrium between growing economic concerns as we see soft data sour a bit, but also the potential for policy shocks that could impact inflation outlooks and the deficit," said Chip Hughey, managing director of fixed income at Truist Advisory Services in Richmond, Virginia. To be neutral means sticking to a portfolio's duration benchmark. For instance, if the benchmark duration is five years, a neutral position would suggest staying in fixed-income assets with five-year maturities or around that vicinity. Duration, which is expressed in number of years, provides an indication on how far the bond's value will fall or rise when interest rates move. In general, when rates fall, higher-duration bonds experience a greater increase in value compared to those with lower duration. Investors extended duration for most of 2024, believing at the time that the Fed would embark on a deep rate-cutting cycle. Long-duration bets typically involve buying longer-dated assets on expectations of a decline in yields. On Wednesday, the U.S. central bank's policy-setting Federal Open Market Committee is widely anticipated to keep its benchmark overnight interest rate in the 4.25%-4.50% range. Stronger-than-expected U.S. nonfarm payrolls data for April last Friday also gave the Fed some leeway to keep rates unchanged. Since the Fed's last meeting in March, President Donald Trump's administration has introduced a massive trade shock that saw effective tariff rates surge, particularly on Chinese goods. That fueled a U.S. Treasuries sell-off that, at one point, pushed benchmark 10-year yields more than 70 basis points (bps) higher to nearly 4.6% over the April 3-11 period. The U.S. 10-year yield is currently at 4.357%. In his post-meeting press conference on Wednesday, Fed Chair Jerome Powell is likely to indicate that Trump's tariff shock could lead to higher inflation and an increase in unemployment, with recession not a far-fetched scenario. NO PRE-EMPTIVE MOVE "The Fed is unlikely to act pre-emptively given its expectation that inflation will be firming and the size of the tariff shock could produce persistent inflation effects," Morgan Stanley analysts led by chief U.S. economist Michael Gapen wrote in a research note. Trump has walked back some of the U.S. tariffs since his self-declared "Liberation Day" on April 2, partly stabilizing bond and stock markets. But overall market anxiety over what will happen next has not dissipated, investors said. "We're telling investors to continue to be cautious and de- risk," said Gregory Peters, co-chief investment officer at PGIM Fixed Income, which has assets under management of $837 billion. "The way I see the tail is that there's only one side of the distribution: I don't see the upside tail. I think there's more of a centering around, from a yield-curve perspective, on the front end because at least that's driven by Fed policy," he said referring to his expectation that the economy will struggle with the Trump administration's tariff policy. He added that the back end, specifically 30-year bonds, are "driven by factors that are well beyond my control and understanding." The market, however, does not expect the Fed to leave rates unchanged much longer. The benchmark federal funds futures market has priced in a nearly 80% chance that the U.S. central bank will resume its rate cuts at its July 29-30 policy meeting, according to LSEG calculations. All told, the market expects about 77 basis points of easing this year. J.P. Morgan's latest Treasury client survey showed that 64% of the U.S. bank's clients are neutral, and 24% are net long overall. That net long position on Treasuries was down from a peak of 32% in the week of April 7, according to Jay Barry, head of global rates strategy at J.P. Morgan. "We're currently neutral, leaning more on the front end of the curve where we have a little bit of comfort that it will be anchored toward Fed cuts going forward," said Anders Persson, chief investment officer and head of global fixed income at Nuveen in Charlotte, North Carolina. "That's recognizing that given all the policy uncertainty, the backdrop of not a whole lot of clarity, that we're not all that comfortable making big bets." Sign in to access your portfolio
