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Yahoo
14-03-2025
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China Boosts Two-Year Bond Sales to Record Amid Debt Selloff
(Bloomberg) -- Chinese bonds face a crucial test this week as the government plans a record issuance of two-year notes just when a debt-market selloff is worsening. NJ College to Merge With State School After Financial Stress NYC Congestion Pricing Toll Gains Support Among City Residents Buffalo's Billion-Dollar Freeway Fix Is on Ice, But Not Because of Trump Where New York City's Zoning Reform Will Add Housing Inside the 'Not Architecture' of High Line Designers Diller Scofidio + Renfro The finance ministry said in a statement it is planning to sell 167 billion yuan ($23 billion) of two-year government bonds on Friday, the largest-ever offering of the tenor in a single auction, according to Bloomberg compiled data. The move may challenge China's debt market, as any signs of weak demand in auctions may accelerate a rout that's already sent the benchmark yield to the highest level this year. Chinese bond yields have jumped this year due to the PBOC's reluctance to ease monetary policy, tight liquidity and optimism toward Chinese stocks. The yield on two-year government debt rose to its highest since October Monday, having surged about 50 basis points since early January, which may deter investors from buying bonds fearing further losses. The yield on 30-year government bond climbed five basis points to trade higher than 2% for the first time this year. The yield on two-year note surged seven basis points to 1.6%, while that on the benchmark 10-year debt climbed six basis points. Funds have boosted their selling of Chinese government bonds on Tuesday, accelerating increases in sovereign yields, according to market participants. The rebound in local stocks had weighed on sentiment toward fixed-income products, they said. They asked not to be identified as they aren't allowed to comment on the rates market publicly. Also on Friday, another 30 billion yuan of 30-year notes will be auctioned, same with the previous issuance. Bond losses accelerated in the past few weeks amid weak demand for notes. One-year yield gained over nine basis points on February 14, the most since 2023, after an auction saw elevated yield on marginal bids. Last week, another batch of one-year notes was sold at the highest yield since April 2024. It may be too early to say the auction result will turn out to be very poor, said Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group. However, in any case, the auction result will be a barometer of sentiment in the market, he said. Expectations remain in place that the PBOC will step up necessary liquidity support for the economy, given persisting deflationary pressures and Beijing's growth ambition in a year of escalating trade tensions with the US. The timing of any bold monetary stimulus remains uncertain amid risks to the yuan. The Chinese central bank has refrained from lowering interest rate or banks' required reserve ratio since September last year. It has also paused on buying of government bonds in the first two months this year. Some local fund houses are seeing benchmark debt yield testing 2%, should there be further delays in RRR cut. China's annual debt supply of new government bonds is set to increase to 11.86 trillion yuan this year, after officials raised the general budget deficit target to around 4% of GDP, the highest level in more than three decades. --With assistance from April Ma and Iris Ouyang. (Updates with latest yields and trader comments.) How Natural Gas Became America's Most Important Export Germany Is Suffering an Identity Crisis 80 Years in the Making Disney's Parks Chief Sees Fortnite as Key to Its Future The Mysterious Billionaire Behind the World's Most Popular Vapes Greenland Voters Weigh Their Election's Most Important Issue: Trump ©2025 Bloomberg L.P.
Yahoo
12-03-2025
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Peru Prepares US Delegation in Bid to Avert Copper Tariffs
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. NJ College to Merge With State School After Financial Stress NYC Congestion Pricing Toll Gains Support Among City Residents Where New York City's Zoning Reform Will Add Housing Buffalo's Billion-Dollar Freeway Fix Is on Ice, But Not Because of Trump Inside the 'Not Architecture' of High Line Designers Diller Scofidio + Renfro World No. 3 copper supplier Peru will send a delegation to meet with US officials after the Trump administration announced plans to introduce copper tariffs that threaten to disrupt metal trade flows. 'The rules of the game are changing quickly under the new North American administration,' Energy and Mines Minister Jorge Montero told reporters in Lima on Monday. Peru is looking to 'avoid being hurt by certain restrictive measures that will be implemented due to US interests.' Governments and industries around the world are grappling with the likely ramifications of tariffs as President Donald Trump looks to revitalize US manufacturing, raise revenue and gain leverage in other disputes. Export-dependent nations such as Peru and Chile are banking on their trade deficits and free-trade agreements with the US as reasons to escape tariffs, as well as the fact that American buyers depend on imported copper for about half their requirements. Trump first mentioned copper as a trade-war tool in late January. Late last month, the president ordered a probe into possible tariffs on national security grounds — offering the industry some relief since such investigations typically take months. That relief proved short-lived when Trump raised the idea of copper tariffs again last week. Peru, the world's No. 3 copper supplier, sends some of its metal to the US, although the majority is shipped in semi-processed form to smelters in China. US producer Freeport-McMoRan Inc. owns Cerro Verde, one of Peru's largest mines mines. Chile is more exposed, with state-owned Codelco the biggest shipper of copper to the US. Montero didn't discuss other Peruvian products that could also be impacted by US tariffs such as blueberries and table grapes. 'Peru is a good strategic ally for the US on business issues, but not just for the US,' Montero said. 'Peru is a non-aligned country, one that's open to investments and business with everyone. We are not committed to a particular geopolitical vision.' (Adds background and context in third and fourth paragraphs) How Natural Gas Became America's Most Important Export Germany Is Suffering an Identity Crisis 80 Years in the Making Disney's Parks Chief Sees Fortnite as Key to Its Future The Mysterious Billionaire Behind the World's Most Popular Vapes Greenland Voters Weigh Their Election's Most Important Issue: Trump ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
12-03-2025
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Carlyle's Currie Says Tariffs to Add Security Premium for Metals
(Bloomberg) -- Carlyle Group Inc.'s Jeff Currie warned of a 'security premium' that will be added to the cost of metals like copper as tariffs mean that countries will need to pay more to ensure domestic supplies. NJ College to Merge With State School After Financial Stress NYC Congestion Pricing Toll Gains Support Among City Residents Where New York City's Zoning Reform Will Add Housing Trump DEI Purge Hits Affordable Housing Groups Electric Construction Equipment Promises a Quiet Revolution 'Energy security is top of mind for everyone around the world right now,' Currie said during an interview with Alix Steel on Bloomberg Radio minutes after President Donald Trump announced plans to increase steel and aluminum tariffs to retaliate against Ontario's move to place a levy on electricity imported from the US. 'Volatility is going to explode across all these markets,' Currie said, referring to energy and metals. The interview took place at the CERAWeek by S&P Global conference. As for oil, Currie says prices could dip to the low $60s per barrel this year, but limited investment and low inventories likely will provide a floor of support for prices. For more on CERAWeek — Day 2, click here for our TOPLive blog. How Natural Gas Became America's Most Important Export Disney's Parks Chief Sees Fortnite as Key to Its Future Germany Is Suffering an Identity Crisis 80 Years in the Making The Mysterious Billionaire Behind the World's Most Popular Vapes How America Got Hooked on H Mart ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
12-03-2025
- Business
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Euro Set for Best Week Since 2009 as BofA Boosts Forecast
(Bloomberg) -- The euro is on the verge of notching its best weekly performance in 16 years, fueled by Germany's pledge to ramp up defense spending and weakness in the US dollar. NJ College to Merge With State School After Financial Stress Trump Administration Plans to Eliminate Dozens of Housing Offices Republican Mayor Braces for Tariffs: 'We Didn't Budget for This' Where New York City's Zoning Reform Will Add Housing Buffalo's Billion-Dollar Freeway Fix Is on Ice, But Not Because of Trump The currency rose as much as 1% to $1.0889 on Friday, its strongest level in four months, taking its surge in the week to almost 5%. Options volumes in the euro-dollar pair hit a record high on Wednesday, according to data from the Depository Trust & Clearing Corporation, with bullish wagers accounting for 70% of total demand in the week, versus February's average of just over 50%. Germany's decision to step back from decades of fiscal reticence has fanned expectations of European growth and stoked traders appetite for the single currency. Hundreds of billion of euros in potential investment from the region's largest economy would give the European Central Bank less need to push on with rate cuts to spur growth, according to Brown Brothers Harriman strategists. Meanwhile, strategists at Bank of America Corp. revised up their forecasts for the euro, citing this week's fiscal announcements and predicting the currency could rally around 6% from current levels by year-end to hit $1.15. 'The announced German fiscal package is a watershed moment for the euro,' said the BofA strategists led by Michalis Rousakis. 'Meanwhile, policy uncertainty poses downside risks to US growth.' Short-term options sentiment in the common currency, as depicted by so-called risk reversals, rose to bullish levels last seen half a decade ago. In the long-term, traders are the least bearish on the euro in three years. Meanwhile, a Bloomberg gauge of the US dollar closed out its worst week since November 2022, falling more than 2%. Immediately after the German spending plans were unveiled, hedge funds added bullish options structures that targeted a move as high as $1.20 into year-end, according to FX traders familiar with the transactions who asked not to be identified because they aren't authorized to speak publicly. Options that pay out on a rally above $1.12 and $1.15 have also been in play since then. The DTCC data show large interest this week for $1.10 strikes, while traders also bet on a move above $1.20 over the next year. Speculative traders in the derivatives market further cut euro shorts in the week ended Tuesday, the day the currency hit a fresh 2025 high on reports of greater defense spending in Europe. Non-commercial investors now hold some $1.3 billion in bearish positions on the common currency, data released Friday by the Commodity Futures Trading Commission and aggregated by Bloomberg show. That's the least since November. --With assistance from Greg Ritchie and Carter Johnson. (Updates pricing, adds CFTC data.) An All-American Finance Empire Drew Billions—and a Regulator's Attention The Mysterious Billionaire Behind the World's Most Popular Vapes Greenland Voters Weigh Their Election's Most Important Issue: Trump Rich People Are Firing a Cash Cannon at the US Economy—But at What Cost? Snack Makers Are Removing Fake Colors From Processed Foods ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
12-03-2025
- Business
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Japan's Finance Minister Says Higher Yields Aren't All Bad
(Bloomberg) -- Japan's rising bond yields will have both positive and negative effects on the economy, the nation's finance minister said Tuesday in a comment likely aimed at easing recent market concern over higher borrowing costs. NJ College to Merge With State School After Financial Stress NYC Congestion Pricing Toll Gains Support Among City Residents Buffalo's Billion-Dollar Freeway Fix Is on Ice, But Not Because of Trump Where New York City's Zoning Reform Will Add Housing Inside the 'Not Architecture' of High Line Designers Diller Scofidio + Renfro While the yield on 10-year government debt fell Tuesday amid global market concerns over the economic outlook, that move came after it hit a 17-year high of 1.575% on Monday. 'Higher yields will impact the economy in multiple ways,' Finance Minister Katsunobu Kato told reporters. While interest payments will rise for issuers, interest received will increase for buyers, he added. Kato was likely trying to play down recent concerns over the upward trajectory of yields. His remarks indicate that the government isn't only looking at rising yields with concern over the implications for how they might ramp up debt-servicing costs or cool economic activity. The finance minister spoke a day after Prime Minister Shigeru Ishiba said that the government 'will ensure thorough preparations' to guard against a sharp rise in long-term yields. Ishiba's comment suggested heightened government concern over the recent gains. The implications of higher interest rates are particularly acute for Japan given its high debt load. The International Monetary Fund estimates the nation's public debt at around 233% of gross domestic product this year. Servicing Japan's oversized debt is already expected to chew up close to a quarter of the annual budget for the year starting in April. For many years the BOJ manipulated long-term bond yields to keep them around zero as part of its efforts to generate an inflation cycle that sparks stronger growth. Last year the central bank scrapped its control of yields and committed itself to paring back its purchases, thereby removing a ceiling on yields and allowing the market to determine pricing. The BOJ still says it will step in if there are sharp moves in yields, but it remains unclear what scale of change would trigger action, creating uncertainty among traders of Japanese government bonds. While the central bank is legally independent from the government they are both committed to the achievement of sustained growth and stable inflation through a 2013 joint accord. Core inflation in Japan is now approaching three years at or above the BOJ's target. So after years of subzero interest rates, the direction of Japanese borrowing costs is on an upward path, even as central banks elsewhere in the world mull the timing of their next rate cuts. Kato touched on the need to maintain steady demand for Japanese government debt to avoid sharp fluctuations in pricing in the wake of the BOJ's stepping back in the market. 'As a bond-issuing authority, I think it's important to aim for stable sales of government bonds,' he said. --With assistance from Takashi Umekawa. How Natural Gas Became America's Most Important Export Germany Is Suffering an Identity Crisis 80 Years in the Making Disney's Parks Chief Sees Fortnite as Key to Its Future The Mysterious Billionaire Behind the World's Most Popular Vapes Greenland Voters Weigh Their Election's Most Important Issue: Trump ©2025 Bloomberg L.P. Sign in to access your portfolio
