Bloomberg: - “The Chinese move to sell suggests central banks are becoming more wary of taking duration risk now with the Federal Reserve firmly into the tapering process,” said Aaron Kohli, an interest-rate strategist ... at BNP Paribas ... “If China continues to sell again in the next month or two, than more worries will arise as to who will buy the country’s debt.”
What's interesting however is that China's treasury position
"adjustments" throughout last year seem to follow treasury
prices (inverse of yields). This is akin to a retail
investor buying high and selling low - chasing the market
with everyone else. While analysts often assign some degree
of sophistication to China's investment strategy, the
positioning in the chart below resembles a fairly
incompetent trading behavior, an unsuccessful attempt to
"time" the market.
Source: The US Treasury |
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