by Mish Shedlock, Mish Talk:
Numerous articles and Tweets have surfaced about China dumping Treasuries. First let’s investigate the rumors. Then let’s look at conditions in which China might dump dollar assets.
Not China Dumping
Until the past week there was a relentless selloff in US treasuries that sent bond yields soaring.
TRUTH LIVES on at https://sgtreport.tv/
Rumors and articles surfaced that China dumping Treasuries was the reason.
I discussed the situation on October 4 in Bond Bulls are Getting Crushed in a Relentless Selloff, It’s Not China
Has China sold any US treasuries? Likely not. Much of what China holds is hidden in State Owned Enterprises and custodied Treasuries.
Et tu Torsten?
(Slok’s charts of the day are generally great but he forget to adjust the major foreign holdings table for valuation changes, Euroclear and Agencies … )
— Brad Setser (@Brad_Setser) October 3, 2023
This should be the definitive chart on whether China has been selling — it literally is what is in the US official data (the US reports China’s purchases/ sales of foreign bonds quarterly) with the Belgium/ Euroclear adjustment. No net sales from q3 22 to q2 22.
— Brad Setser (@Brad_Setser) October 3, 2023
No Net Sales
As I read the chart, there is no net sales since mid-2020 and only small, brief sales all the way back to 2018 with net accumulation since then.
