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Russia recently dumped the majority of its UST, widely believed to cause the treasury rate to hit 3%. Some commentators speculated the reason for this was 1) t
by divbyzer0 8y ago
Russia recently dumped the majority of its UST, widely believed to cause the treasury rate to hit 3%. Some commentators speculated the reason for this was
1) to avoid future potential sanctions
2) a trial-run to gauge how the market would react to a similar move by China.
At its peak Russia held less than $0.2T, Russia liquidated approx $50B per month for 3 months. If China dumped $75B per month for 6 months, there would be pain that would likely spread into corporate bonds.
https://money.cnn.com/2018/07/30/investing/russia-us-debt-treasury/index.html https://money.cnn.com/2018/07/30/investing/russia-us-debt-tr...
https://www.bloomberg.com/view/articles/2018-10-16/russia-s-bottom-for-u-s-treasuries-turns-out-to-be-zero https://www.bloomberg.com/view/articles/2018-10-16/russia-s-...
(edit: formatting)
- panarky 8y agoDid Russia liquidate their Treasurys or just move them offshore? The Kremlin may be trying to pull off a balancing act by mostly shifting its cache offshore, rather than selling outright. Analysts at the Council of Foreign Relations this week found that holdings of American bonds in Belgium and the Cayman Islands increased by about $45 billion in the same period that Russia was reducing its U.S.-based hoard, meaning it may have been an attempt to protect against seizure. https://www.bloomberg.com/news/articles/2018-08-15/russian-game-of-cat-and-mouse-with-u-s-puts-debt-cache-in-doubt https://www.bloomberg.com/news/articles/2018-08-15/russian-g...
- divbyzer0 8y agoThere was a previous sell-off 2015, the buyer was almost exclusively Belgium. I had assumed (without evidence) it was the US. A plunge protection team of sorts. ZH suggest the buyer was China. https://www.zerohedge.com/news/2015-05-18/revealing-identity-mystery-belgian-buyer-us-treasurys https://www.zerohedge.com/news/2015-05-18/revealing-identity...