The Treasury Department in Washington, D.C.
Adam Jeffery | CNBC
As trade tensions with the U.S. intensified, China sold off its Treasury holdings at the fastest pace in about two years during March.
$ 20.5 billion, just below $ 20.5 billion, slightly lower than $ 1.12 trillion. But the move represents a continued pattern of declines that comes as the two sides have been unable to hammer out a long-term trade agreement and instead have been engaging in a tit-for-tax tariff that has been escalated in recent days. ] In the 1
The threat of the nation either not buying Treasurys or engaging in outright sales has shaken the bond market before.
More aggressive actions to cut holdings are considered a nuclear option that could further aggravate ongoing trade negotiations.
] The impact, though, or any such moves is unclear.
UBS estimates that the reduction is gradual, the most likely would result in a benchmark 10-year Treasury yield or at most 0.4 percentage points. "To the extent that China's Treasury sales could be either the cause of the effect of a more risk-averse global environment, the positive impact on Treasury yields could be smaller than estimated if private investors step up their Treasury purchases," UBS strategist Chirag Mirani and others in a note to clients
China's share of total US Japan compared to other global government declined to 17.3%, the lowest since June 2006. Japan is the second largest holder, with $ 1.08 trillion, while the UK stepped into third place as it increased its level to $ 317.1 billion.
Foreign government ownership of US Debt hit a fresh record of $ 6.47 trillion, up 4% from a year ago, as the government's total debt continues to swell and now has topped $ 22 trillion. Foreign residents increased their holdings by $ 23.9 billion.