Monday’s trade session will fall as one of the most unstable since the Covid crash in March 2020, with the global markets trapped in the cross -fire as the US and China face over the tariffs, and neither superpower shows any impulse to settle down.
As the stock markets spread, the volatility of each asset class wasted. For example, Bitcoin (BTC) swung as much as 10% intraday. However, the real focus is on the American 10-year state dividend. It is the so-called risk-free interest rate that the Trump administration said it wants to lower as it appears to refinance trillion in national debt.
The yield fell to 3.9% from 4.8% late last week after President Donald Trump strengthened merchant voltages with sweeping import tariffs and increased demand for the Treasury.
Bond prices typically rise and send yields lower when Wall Street becomes risk. Unusual, as the risk aversion rose Monday, the yield was higher and ran to 4.22%.
This increase was not limited to the United States, Britain experienced its sharpest speed jump since Liz Trusera’s pension crisis in October 2022, giving increased globally, and signaling growing instability and reducing confidence in superb debt and currencies.
Ole S Hansen, head of the raw material strategy at Saxobank, pointed to the scope of the move for a long time dated treasuries as a sign of something deeper potential unfolding.
“US Treasuries suffered a massive sale yesterday, with long yields rising most since the turbulence under the pandemic outbreak, possible signs of large holders of treasuries, such as foreign proprietors selling and repatriating their assets,” Hansen said in a post of X. “The 30-year-old US Treasury Benchmark Rose from low rod nearby 4.17% from a low near 3.85% the previous day.”
While Hansen pointed fingers at foreign sales, especially China, which is said to have relieved $ 50 billion in treasuries, Jim Bianco challenged President of Bianco Research this tale.
“No, foreigners did not sell treasuries to punish the United States (Trump),” he wrote, pointing instead to a sharp rally in the dollar index (DXY) that climbed 2.2% in just three days.
“If China or other foreigners sold treasuries … they would have to convert these dollars to a foreign currency. Otherwise, selling treasuries and leaving the money in dollars in a US bank.
“This suggests that foreign money moved into the United States, not away from it … Sales were more domestic and more concerned about inflation.”
Despite these views, unconfirmed reports of China’s sales continue to circulate. From January 2025, China still had about $ 761 billion in US government debt, the largest owner after Japan.
The story that the 10-year-old and 30-year-old yields rose in Chinese is compelling because most of the official Chinese investments in dollar-denominated assets are not in longer duration instruments, but agency bonds, shorter bills and bank deposits.
There is a perception that China can get leverage in the trade war through its possessions of the US Treasury. It is not necessarily true.
As the economist and author of “The Great Rebalancing: Trade, Conflict and the Perilous Road for Out for the World Economy” Michael Pettis has long claimed, China’s possession of US Ministry of Finance
It’s no surprise that China has lightened its tax chamber investments since 2013 with its profits in current account, peaking during the 2008 crash.
