It sounds like a conversation one might have with his or her irascible grandfather or Donald Trump: The United States owes China a lot of money by way of all the U.S. Treasurys China has gobbled up over the years, and one day, China is going to come calling, wanting to be paid.
That day may have already arrived. Sure, two days of surging equity markets is playing a part, but it is worth noting 10-year Treasury yields have jumped nearly 6 percent over the past five days. Bond yields rise as prices fall, and prices fall, usually, because investors are selling. China is doing that with some of its massive Treasury stakes because it needs dollars to support its recently devalued currency, the yuan.
China's Actions
“The People’s Bank of China has been offloading dollars and buying yuan to support the exchange rate, a policy that’s contributed to a $315 billion drop in its foreign-exchange reserves over the last 12 months.
/www.benzinga.com/trading-ideas/long-ideas/15/08/5797171/blame-china-if-your-treasury-etf-is-falling alt=Blame China If Your Treasury ETF Is Falling>Full story available on Benzinga.com
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