Though the demand for the US Treasury bonds has been increasing lately, some investors got rid of these securities. Thus, China sold bonds worth USD 7.7 billion. At first sight, it is quite an impressive sum, but for the PRC it is just a drop in the bucket as its holdings of the US Treasuries are huge. On the other hand, some countries such as France and Norway decided to embrace the moment and replenish their holdings of the US bonds by USD 17.6 billion and USD 11.1 billion correspondingly. Turkey also got involved. While the Turks are burning dollars, encouraged by Erdogan’s bold statements, the government is increasing investments in the US Treasuries.
But let us get back to China. If we study the dynamics of the US debt market and compare certain time intervals, we will get interesting results. In July the Treasuries surged. Most analysts attributed this to active sales of bonds by China. Interestingly, the yield of the US bonds is growing robustly now though the US announced new import duties on Chinese goods. Perhaps, China continues a massive selloff of the US securities. By the way, in the first half of this year, Russia almost emptied its holdings of the treasuries, which coincided with a sharp increase in yields.
