Monday, February 20, 2017

Distriubtion In #Bonds Becoming Obvious

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The poisonous political climate might blame Trump for the selling but the motivation is purely economic. Fear of future liquidity and lack of demand in a debt crisis likely to unfold in 2017 has smart money shortening their duration by selling long-term treasury bonds and replacing them with shorter term notes and bills for years. While the message of market points towards short-term consolidation in the credit market, it won't reverse the distribution that became obvious in late 2016.

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Headline: America’s Biggest Creditors Dump Treasuries in Warning to Trump

In the age of Trump, America’s biggestforeign creditors are suddenly having second thoughts about financing the U.S. government.

In Japan, the largest holder of Treasuries, investors culled their stakes in December by the most in almost four years, the Ministry of Finance’s most recent figures show. What’s striking is the selling has persisted at a time when going abroad has rarely been soattractive. And it’s not just the Japanese. Across the world, foreigners are pulling back from U.S. debt likenever before.


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