Latest news with #MartinWhetton
Time of India
03-05-2025
- Business
- Time of India
Japan warns of ‘nuclear option' in trade talks, threatens to use its massive $1.1 trillion U.S. debt holdings as a weapon in tense standoff with Donald Trump
Japan has signalled that it's willing to use what some refer to as its "nuclear option", utilizing the fact that it's America's largest foreign creditor by making its $1.1 trillion worth of US Treasury holdings a bargaining tool, as per a report. #Pahalgam Terrorist Attack Code of war: India and Pakistan take their battle to the (web)front Forex reserves show a pauperised Pakistan, a prospering India Pakistan conducts training launch of surface-to surface ballistic missile Japanese Finance Minister Katsunobu Kato said 'We obviously need to put all cards on the table in negotiations. It could be among such cards,' also mentioning, 'Whether we actually use that card, however, is a different question,' quoted Fortune. A $1.1 Trillion Pressure Point Japan's US sovereign debt holdings are huge, amounting to approximately a quarter of its own GDP, as per the report. Although the stockpile is kept for intervention in the foreign exchange market to stabilize the yen, officials now indicate that it can also be used as leverage over Washington in deterring extreme demands, according to Fortune. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In Tirane - Watch What Happens Happy in Shape Undo If Japan were to dump even a fraction of its Treasury bonds, it would cause a ripple effect, borrowing costs for the US would soar, and interest rates on everything from home loans to auto loans could increase, as per the report. Fortune wrote that "All securities, equities included, are furthermore priced off Treasury bonds, since their interest rate guarantees the risk-free return every investor can expect." A Double-Edged Sword The consequences of Japan selling off its US bonds would also have an impact on Tokyo, with the yen shooting up against the dollar. But the threat would be more on the US economy, which depends on foreign investment to fuel its consumer-based economy, as per Fortune. Live Events According to the report, most investors consider Japan's threat to be more of a psychological pressure rather than an actual plan. The head of financial markets strategy at Westpac, Martin Whetton said, 'Playing the card early while the U.S. bond market is in the minds of the administration after recent weeks is a smart move,' quoted Fortune. FAQs How could Japan using its US debt holdings affect the US economy? If Japan sells a significant portion of its US Treasury bonds, it could raise borrowing costs in the US, as per Fortune. Could Japan really sell off its US Treasury bonds? While it's technically possible, doing so would have serious consequences for both Japan and the US economies, making it more of a negotiating tactic.
Observer
08-04-2025
- Business
- Observer
Sudden selloff shakes US bond market
Singapore:US Treasuries extended a sharp retreat on Tuesday as investors were having to sell bonds to cover losses in other assets and scrambled to unwind expectations for deep US rate cuts, in the latest unsettling sign of possible stress in financial markets. Monday's range for the benchmark 10-year yield was one of the largest in the past two decades while expectations evaporated that the Federal Reserve would start cutting interest rates within weeks to offset the economic pain caused by huge US import tariffs. Ten-year yields shot from an overnight low of 3.87% to touch 4.216% in the Asian day. Market participants said the scale of moves and uncertainty in Fed funds futures trade was unprecedented, as pricing for 130 basis points of US rate cuts this year collapsed to 92 bps in a matter of hours. Monday's 35-basis-point yield range was the eighth-largest on Tradeweb data stretching back 25 years. It was not clear what flipped the switch from buying to selling, but the sudden turnaround pointed to pressure on stock markets and sentiment as markets lurch towards an April 9 deadline for US tariffs. The S&P 500 has lost 10.7% in three sessions. "What do you sell if you need to meet margin calls or liquidity? Treasuries and gold," said Martin Whetton, head of financial markets strategy at Westpac in Sydney. Buyers were so scarce that the selling pushed bond yields out of line with swaps and sharply widened a usually steady spread between the two. At the 10-year tenor the gap has shot to more than 50 basis points, the largest on record, while the speed of the move in the past few days has also been record-breaking. "It just is a further validation of the theory that there's less physical buying of Treasuries," said Andrew Lilley, chief interest rates strategist at Sydney-based investment bank Barrenjoey. "There's a period of time in any market blow up, where you are not even attempting to think through the implications. You are simply liquidating all your risk." Lilley said markets may also be starting to come to terms with a changed trade outlook that could reduce foreign trade surpluses and international flows into the Treasury market, while others said markets were simply unstable. "There's a conspicuous lack of clarity," said Vishnu Varathan, head of macro research for Asia outside of Japan at Mizuho in Singapore. Two-year yields rose 7 basis points overnight and inched up to 3.796% in the Asia session.— Reuters
Reuters
08-04-2025
- Business
- Reuters
Sudden selloff shakes US bond market
SINGAPORE, April 8 (Reuters) - U.S. Treasuries extended a sharp retreat on Tuesday as investors were having to sell bonds to cover losses in other assets and scrambled to unwind expectations for deep U.S. rate cuts, in the latest unsettling sign of possible stress in financial markets. Monday's range for the benchmark 10-year yield was one of the largest in the past two decades while expectations evaporated that the Federal Reserve would start cutting interest rates within weeks to offset the economic pain caused by huge U.S. import tariffs. Ten-year yields shot from an overnight low of 3.87% to touch 4.216% in the Asian day. Market participants said the scale of moves and uncertainty in Fed funds futures trade was unprecedented, as pricing for 130 basis points of U.S. rate cuts this year collapsed to 92 bps in a matter of hours. Monday's 35-basis-point yield range was the eighth-largest on Tradeweb data stretching back 25 years. It was not clear what flipped the switch from buying to selling, but the sudden turnaround pointed to pressure on stock markets and sentiment as markets lurch towards an April 9 deadline for U.S. tariffs. The S&P 500 (.SPX), opens new tab has lost 10.7% in three sessions. "What do you sell if you need to meet margin calls or liquidity? Treasuries and gold," said Martin Whetton, head of financial markets strategy at Westpac in Sydney. Buyers were so scarce that the selling pushed bond yields out of line with swaps and sharply widened a usually steady spread between the two. At the 10-year tenor the gap has shot to more than 50 basis points, the largest on record, while the speed of the move in the past few days has also been record-breaking. "It just is a further validation of the theory that there's less physical buying of Treasuries," said Andrew Lilley, chief interest rates strategist at Sydney-based investment bank Barrenjoey. "There's a period of time in any market blow up, where you are not even attempting to think through the implications. You are simply liquidating all your risk." Lilley said markets may also be starting to come to terms with a changed trade outlook that could reduce foreign trade surpluses and international flows into the Treasury market, while others said markets were simply unstable. "There's a conspicuous lack of clarity," said Vishnu Varathan, head of macro research for Asia outside of Japan at Mizuho in Singapore. Two-year yields rose 7 basis points overnight and inched up to 3.796% in the Asia session.
Yahoo
08-04-2025
- Business
- Yahoo
Sudden selloff shakes US bond market
SINGAPORE (Reuters) - U.S. Treasuries extended a sharp retreat on Tuesday as investors were having to sell bonds to cover losses in other assets and scrambled to unwind expectations for deep U.S. rate cuts, in the latest unsettling sign of possible stress in financial markets. Monday's range for the benchmark 10-year yield was one of the largest in the past two decades while expectations evaporated that the Federal Reserve would start cutting interest rates within weeks to offset the economic pain caused by huge U.S. import tariffs. Ten-year yields shot from an overnight low of 3.87% to touch 4.216% in the Asian day. Market participants said the scale of moves and uncertainty in Fed funds futures trade was unprecedented, as pricing for 130 basis points of U.S. rate cuts this year collapsed to 92 bps in a matter of hours. Monday's 35-basis-point yield range was the eighth-largest on Tradeweb data stretching back 25 years. It was not clear what flipped the switch from buying to selling, but the sudden turnaround pointed to pressure on stock markets and sentiment as markets lurch towards an April 9 deadline for U.S. tariffs. The S&P 500 has lost 10.7% in three sessions. "What do you sell if you need to meet margin calls or liquidity? Treasuries and gold," said Martin Whetton, head of financial markets strategy at Westpac in Sydney. Buyers were so scarce that the selling pushed bond yields out of line with swaps and sharply widened a usually steady spread between the two. At the 10-year tenor the gap has shot to more than 50 basis points, the largest on record, while the speed of the move in the past few days has also been record-breaking. "It just is a further validation of the theory that there's less physical buying of Treasuries," said Andrew Lilley, chief interest rates strategist at Sydney-based investment bank Barrenjoey. "There's a period of time in any market blow up, where you are not even attempting to think through the implications. You are simply liquidating all your risk." Lilley said markets may also be starting to come to terms with a changed trade outlook that could reduce foreign trade surpluses and international flows into the Treasury market, while others said markets were simply unstable. "There's a conspicuous lack of clarity," said Vishnu Varathan, head of macro research for Asia outside of Japan at Mizuho in Singapore. Two-year yields rose 7 basis points overnight and inched up to 3.796% in the Asia session.
Zawya
08-04-2025
- Business
- Zawya
Sudden selloff shakes US bond market
SINGAPORE - U.S. Treasuries extended a sharp retreat on Tuesday as investors were having to sell bonds to cover losses in other assets and scrambled to unwind expectations for deep U.S. rate cuts, in the latest unsettling sign of possible stress in financial markets. Monday's range for the benchmark 10-year yield was one of the largest in the past two decades while expectations evaporated that the Federal Reserve would start cutting interest rates within weeks to offset the economic pain caused by huge U.S. import tariffs. Ten-year yields shot from an overnight low of 3.87% to touch 4.216% in the Asian day. Market participants said the scale of moves and uncertainty in Fed funds futures trade was unprecedented, as pricing for 130 basis points of U.S. rate cuts this year collapsed to 92 bps in a matter of hours. Monday's 35-basis-point yield range was the eighth-largest on Tradeweb data stretching back 25 years. It was not clear what flipped the switch from buying to selling, but the sudden turnaround pointed to pressure on stock markets and sentiment as markets lurch towards an April 9 deadline for U.S. tariffs. The S&P 500 has lost 10.7% in three sessions. "What do you sell if you need to meet margin calls or liquidity? Treasuries and gold," said Martin Whetton, head of financial markets strategy at Westpac in Sydney. Buyers were so scarce that the selling pushed bond yields out of line with swaps and sharply widened a usually steady spread between the two. At the 10-year tenor the gap has shot to more than 50 basis points, the largest on record, while the speed of the move in the past few days has also been record-breaking. "It just is a further validation of the theory that there's less physical buying of Treasuries," said Andrew Lilley, chief interest rates strategist at Sydney-based investment bank Barrenjoey. "There's a period of time in any market blow up, where you are not even attempting to think through the implications. You are simply liquidating all your risk." Lilley said markets may also be starting to come to terms with a changed trade outlook that could reduce foreign trade surpluses and international flows into the Treasury market, while others said markets were simply unstable. "There's a conspicuous lack of clarity," said Vishnu Varathan, head of macro research for Asia outside of Japan at Mizuho in Singapore. Two-year yields rose 7 basis points overnight and inched up to 3.796% in the Asia session.
