Government Bond ETFs
- 1065.121
- +2.214+0.21%
The sell-off is not over yet! USA Assets are still being "disdained" by overseas investors…
① According to data provided by Deutsche Bank, despite the market recovering over the past week, foreign investors' willingness to invest in USA assets continues to decline; ② Deutsche Bank's Forex research director George Saravelos believes that the recent data on USA capital flows is concerning.
"Debt ceiling" causes trouble! The U.S. Treasury Department's borrowing expectations for Q2 increase threefold, excluding the impact, borrowing decreases instead of increasing.
The U.S. Treasury announced on Monday that the estimated net borrowing for the second quarter is 391 billion dollars higher than expected in February, due to Congress not yet raising the federal debt ceiling, and the initial cash reserves at the beginning of the second quarter being far lower than previously anticipated. The Treasury stated that if the cash balance at the beginning of the season is not taken into account, the estimated borrowing for the second quarter is actually 53 billion dollars lower than the forecast made in February. Some analysts believe this is because DOGE is indeed having an effect, improving the fiscal situation and reducing financing demand.
Besent's new bond issuance strategy: short-term bonds "steady", long-term bonds "gradual", closely monitoring stablecoin "major investors".
On Wednesday, the USA Treasury will announce the bond auction scale for the quarter from May to July. The market expects the Treasury to continue issuing bonds at the established pace, with next week's quarterly redemption auction expected to remain around 125 billion dollars. Some believe the market may interpret this as the Treasury being more inclined to rely on short-term bonds, which is a positive signal for long-term bonds.
U.S. stock index futures slightly lower as the busiest week of Earnings Reports season approaches | Highlights for tonight.
①IBM plans to invest 150 billion USD in the USA over the next five years; ②MicroStrategy increased its shareholding by 15,355 Bitcoins last week; ③Rating agencies have downgraded the outlook for US ports to negative; ④Reports: Tencent, Alibaba, and ByteDance are scrambling to purchase computing power resources.
Economic officials of "Trump 1.0" state that the impact of tariffs will become apparent nationwide by the end of next month, with the poorest suffering the most.
The former director of the White House National Economic Council stated that the "soft data" reflecting future expectations is weakening; before commodity prices rise due to tariffs, those with lower income levels or economic strength will use 100% of their salaries to purchase commodities, while the wealthy will save a higher proportion of their income, with the former being more severely impacted.
Who can tame that "drunken dragon"? The market is completely counting on Besente.
The last line of defense on Wall Street?
Is It Time to Buy U.S. Treasuries on the Dip?
Trump's 'war' with the Federal Reserve has permanently damaged the credit of U.S. bonds.
Concerns about the independence of the Federal Reserve have led investors to intensify the selling of U.S. Treasuries, questioning the credibility of Treasuries as a safe-haven asset. Analysts point out that if the Federal Reserve shifts to a more lenient stance on inflation as Trump desires, or if Trump prematurely nominates a 'shadow chairman' to intervene in monetary policy, the Treasury market will decline further.
New Federal Reserve News Agency: Trump has made it "harder" for the next Federal Reserve chairman.
The market worries that Trump's public belittling and pressure on Powell will leave an indelible "original sin" for Powell's successor. Regardless of who the next chairman is, the independence of the Federal Reserve will be in question. An independent central bank is often seen as more objective and professional, making its decisions more likely to guide market expectations and stabilize the economy. Since President Clinton's era, most U.S. presidents have adopted a stance of "non-interference" with the Federal Reserve.
The U.S. Treasury's 7-year bond auction was lackluster, with the problem still lying in overseas demand.
The portion of indirect bids representing overseas demand only secured 59.3% of the total allocation, down from March's 61.2%, marking the lowest level since December 2021. This marks the second consecutive auction of the 7-year bond to experience a tail. Analysts say that if foreign demand really collapses, the Federal Reserve will have no choice but to intervene and start monetizing these government bonds.
Citadel CEO Griffin: Trump's trade war has become "meaningless", damaging the USA's Assets brand and making Americans poorer.
Griffin believes that Trump's actions have tarnished the once "unparalleled" excellent reputation of USA Assets, including US Treasury bonds, the strength of the US dollar, and national creditworthiness. His tariff policies have failed to bring manufacturing back to the USA and have instead made the USA "20% poorer all around," making the trade war "meaningless" and producing no winners.
Bond giant PIMCO is "shorting": underweighting the dollar!
Investors are increasingly turning to "home country Assets."
The founder of Castle Invest warns Trump: Do not tarnish the reputation of USA national debt.
① Ken Griffin, founder and CEO of Castle Investment, stated on Wednesday that the Global trade dispute initiated by President Trump is damaging the national image of the USA and the reputation of the USA bond market; ② Griffin pointed out that the credit value of USA Treasury bonds was once unmatched, but now we are putting this prestigious label at risk.
The USA Treasury's 5-year bond auction remained stable, overseas demand decreased, but did not collapse.
On Wednesday local time, the USA Treasury auctioned 70 billion dollars of 5-year government bonds. Following the disappointing auction of 2-year US bonds yesterday and a significant drop in overseas demand, the market is concerned that the 5-year US bond auction on Wednesday will also face a lukewarm response, particularly worrying about the demand from overseas buyers.
More and more evidence is emerging: foreign investors sold off U.S. Treasury bonds in large quantities in April.
① Increasing evidence suggests that as the tariff war initiated by USA President Trump continues to escalate, concerns about foreign investors accelerating the selling of US Treasury bonds may have indeed become a reality in April; ② The latest auction of 2-year US Treasuries conducted on Tuesday also shows a lack of demand from overseas investors.
The collapse of the USA's "soft" data continues, with the Richmond Federal Reserve's manufacturing new Order expectations hitting a record low.
On Tuesday, the two pieces of "soft data" released by the USA performed poorly, continuing the trend of the previous collapse of several soft data.
Buyers of U.S. Treasury bonds have started to "strike": the overseas demand for 2-year U.S. Treasury bonds has reached a two-year low.
On Tuesday local time, the USA Treasury auctioned 69 billion dollars of two-year government bonds, with the final winning yield rate at 3.795%, the lowest level since last September, down from 3.984% on March 25.
Is it true that the Japanese are the ones buying U.S. bonds? In the first two weeks of April, Japanese Institutions sold over 20 billion dollars in foreign debt, setting a new record high in 20 years!
According to preliminary data from the Ministry of Finance of Japan, in the week ending April 4, private institutions, including Banks and Retirement Funds, sold long-term foreign Bonds worth 17.5 billion USD, followed by another sale of 3.6 billion USD in the following week. Nomura believes that "a significant portion of the sales may be US Treasury Bonds or US agency Bonds."
The impact of Trump's tariffs on the "USA exceptionalism"! Morgan Stanley: Funds are flowing from the USA to Europe and Japan.
① Vishal Khanduja, head of broad market Fixed Income at Morgan Stanley, stated that the long-term US Treasury has fallen, and the exceptionalism of the USA is under threat, with Capital Trend moving towards Europe, Japan, and Gold; ② Khanduja believes that the USA needs to present a clear and sustainable deficit reduction plan in order to maintain its safe-haven status.
The real Trump 2.0 Trade: Selling off the USA!
Media analysis suggests that Trump's attacks on the Federal Reserve are further pushing the world away from the USA's dominant path, as governments and investors are losing confidence in the dollar and US government bonds.