Central Bankers sell record levels of U.S. Debt

[cpwill]

This is going to get worse, too, when the PBoC has to backstop the losses in much of its' finance sector.

Central banks sold a record amount of US Treasury debt last week while bond funds suffered the biggest ever investor withdrawals as markets shuddered at the prospect of the US Federal Reserve ending its quantitative easing programme.

Holdings of US Treasuries held at the Fed on behalf of official foreign institutions dropped a record $32.4bn to $2.93tn, eclipsing the prior mark of $24bn in August 2007. It was the third week of outflows in the past four....

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. Central banks sell record sums of US debt - FT.com

Fixed income markets have tumbled since Fed chairman Ben Bernanke first signalled on May 22 that the US central bank would begin reducing its asset purchases later this year. Yields on 10-year US Treasuries have risen sharply since then, hitting 2.52 per cent on Friday compared with 1.62 per cent at the start of May.
The noticeable rise in short-term Treasury yields – in spite of the Fed stressing it is in no hurry to tighten policy – could be the result of developing countries selling Treasury holdings to finance currency interventions.




High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. Central banks sell record sums of US debt - FT.com

Equity funds failed to benefit from the move out of fixed income, with redemptions hitting $13bn in the week ending June 26.

Japan was the only place to see net equity inflows in the past week, but Japanese investors, big holders of US Treasury debt, dumped a net $12bn of foreign bonds last week, their biggest sale in 14 months.

Gosh. Who could have predicted such a thing.


Wait......