Bullish Development for US T-Bills: China Has Sold 97% of Its Holdings

A few days ago, in a post titled Treasuries Notes Rise for Seventh Week, the longest streak in more than two years I wrote how extreme negative sentiment was the source of current rally in Treasury Notes and that I did expect this to continue.

So far, the rise of treasuries and the deflation trade have continued as expected. Many people continue to show extreme bearishness, and continue to talk about hyper-inflation and US defaulting...
(CNSNews) - China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.
Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report.
Another very bullish news for treasuries is that China has sold 97% of their T-Bills holding. At first you might think I've lost it and that it is the opposite. But then, consider that they have sold this huge amount of treasuries, and that the market rose nonetheless. It shows a lot resiliency in the demand (thank you Ben Bernanke...) and also shows that there aren't many sellers left (except of course the treasury department themselves...).

1 comment:

Anonymous said...

This is short term ones only.
Means f.a. at the end of the day.
Mish has a good read on this.