China, Foreign Central Banks Dumped US Treasuries Just As Yields Blew Out

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by Tyler Durden
Thursday, Oct 19, 2023 - 02:20 AM

Yesterday we said that one of the biggest market mysteries since the early summer, is who or what has been behind the relentless dump in Treasuries, and resulting surge in yields: some of the proposed reasons have included the "stronger than expected" US economy (i.e. Bidenomics), the market' long overdue realization that the US fiscal trajectory - the exploding debt and deficits - is unsustainable (i.e., Bideficitnomics), term premium, CTA selling, aggressive basis trades and so on. What was lost in this list of growing sophistication was the simplest reason of all: current holders selling Treasuries.

To be sure, some had suggested that as part of the world's response to the US weaponization of the dollar, none other than China (and/or other anti-Western nations) have followed Russia's example and sent the Biden admin a not so subtle message with relentless, coordinated selling of US paper.

And indeed, extending on what we noted yesterday, today's latest TIC data report from the US Treasury showed that , Chinese holdings of US Treasuries dropped again, sliding by another $16 billion to $805.4 billion, the lowest since 2009, and down a record 20 of the past 22 months!