Central Bank of the Republic of Turkey (CBRT) has sold off nearly half of its U.S. government bonds in six months, figures from the CBRT and U.S. Treasury have shown. According to official records, from November 2017 to June 2018, Turkey's U.S. government bonds gradually decreased from $61.2 billion to $32.6 billion. The period in which the TCMB started selling off the bonds, late 2017, coincides with the months in which Turkey-U.S. relations got in tatters over U.S. embassy personnel detained for links to the Gülenist Terror Group (FETÖ). In addition to U.S.' support to YPG terrorists in Syria and the fact that Washington has done nothing to even evaluate Turkey's request for the extradition of FETÖ leader Fetullah Gülen, another crisis between the two NATO allies erupted after Turkey arrested American pastor Andrew Brunson over terror links. The U.S. government bonds in Turkey's possession saw another sharp decline upon the Brunson crisis. In March 2018, the bonds … [Read more...] about Turkish Central Bank sells off half of US government bonds in 6 months
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The country's share in treasury notes has dropped by more than 80 percent since March. For many years Russia has been one of the largest holders of U.S. Treasury bonds, but that seems to be no longer the case. Since March, Russia has significantlycut its holdings from $96.1 billion to $14.9 billion in May, which means it's no longer a leading investor in the U.S. government bonds, and it’s now well behind China, Chile and Kazakhstan. Russia's total investment in U.S. bonds has almost returned to mid-2007 levels ($14.7 billion). According to Elvira Nabiullina, head of Russia’s Central Bank, the sell-off came as part of efforts to diversify the country’s international reserve portfolio. “We have increased ourgold reserves almost 10 times in the past 10 years,” she said. “We are diversifying our currency portfolio … assessing all the risks, including financial, economic and geopolitical.” (link in Russian) Experts believe … [Read more...] about Why is Russia selling off its U.S. bonds?
It’s bad enough for Americans that the U.S. men’s team failed to qualify for the 2018 World Cup. But to add insult to injury, the tournament may have cost Uncle Sam during this week’s Treasury auctions.The U.S. government’s three-month and four-week bill sales on Monday both drew the weakest demand since 2008 as measured by investors’ bids relative to the amount issued. As a result, the interest rate that the Treasury must pay was higher than indicated before the auctions. In a note recapping the poor three-month bill offering, Thomas Simons at Jefferies suggested “the simultaneous Brazil-Mexico World Cup match might have had a negative impact on auction participation.”At first glance, that seems like an all-too-convenient way to write off a poor result. After all, as my colleague Robert Burgess wrote, nothing is as unthinkable to investors as a failed Treasury auction. And this wasn’t even a heavy lift — the … [Read more...] about U.S. Loses at World Cup and It’s Not Even Playing
U.S. mortgage applications recorded their steepest weekly fall in over four months even as most home borrowing costs fell in step with lower bond yields, the Mortgage Bankers Association said on Wednesday, Reuters reports. The Washington-based industry group’s seasonally adjusted index on loan requests to buy a home or to refinance an existing one fell 4.9 percent to 365.3 in the week ended June 22. This marked the index’s biggest fall since the 6.6 percent drop in the week of Feb. 16. Interest rates on most mortgages fell from the prior week, although the average rate on 30-year conforming loans or those with loan balances of $453,100 or less, edged up 1 basis point to 4.84 percent. Last week, home borrowing costs generally declined with Treasury yields as investors preferred U.S. government bonds and other less risky investments because of worries about the escalating trade conflict between China and the United States, the world’s two biggest economies. Follow … [Read more...] about U.S. mortgage applications post biggest drop in four months
The U.S. Dollar posted a two-sided trade last week before settling nearly flat. Bullish investors drove the Greenback to a multi-month high after 10-year Treasury yields took out the psychological 3 percent level for a second time in a month. However, the rally stopped and the dollar retreated against a basket of currencies after the U.S. government reported weaker-than-expected consumer inflation data. June U.S. Dollar Index futures settled at 92.411, up 0.003 or +0.00%. Additionally, a surge in crude oil prices after President Trump announced the U.S. withdrawal from the Iran nuclear accord, drove up demand for commodity-linked assets, further weakening the U.S. Dollar. The dollar rallied against a basket of currencies early last week as investors continued to bet on additional rate hikes by the U.S. Federal Reserve and as they bet against an early withdraw of stimulus by the European Central Bank. Essentially, the divergence in monetary policy trends between the U.S. and other major … [Read more...] about Dollar Gives Up Weekly Gains after U.S. Reports Soft Consumer Inflation Data