Weak Foreign Demand for Treasuries

V

vrothenberg

Bloomberg Economic Calendar:
Markets could tumble if Treasury International Capital data show the slightest weakness in Chinese or Japanese demand for Treasuries.
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Thoughts?

Even if data get's fluffed up full of bullshitted, the Chinese and Japanese are getting more and more uneasy about being America's creditor.

What would you short in this scenario?
 
Quote from vrothenberg:
What would you "short-sell" in this scenario?
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Nothing. Foreign investors tend to sell foreign securities at longer-term bottoms. They are the "final fool" to sell out and short-sell. Besides, any weakness in the stock market will create a frenzy of bond buying. We'll see. :cool:
 
Quote from nazzdack:

Nothing. Foreign investors tend to sell foreign securities at longer-term bottoms. They are the "final fool" to sell out and short-sell. Besides, any weakness in the stock market will create a frenzy of bond buying. We'll see. :cool:
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Interesting how that works. So let's say in a hypothetical scenario China and Japan stop buying our treasuries. What would you?

P.S. I'm relatively new to trading so I'm gauging veterans' opinions about all this :)
 
Quote from vrothenberg:
.....I'm gauging veterans' opinions about all this :)
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It's "better" if you act on your own ideas/opinions instead of seeking confirmation from others. It's "good" to "learn" about trading before making trades but usually people start to learn after they begin to trade. :cool:
 
Quote from vrothenberg:

Bloomberg Economic Calendar:

Thoughts?

Even if data get's fluffed up full of bullshitted, the Chinese and Japanese are getting more and more uneasy about being America's creditor.

What would you short in this scenario?
More...
These are complicated issues you're raising. One thing's for sure... If they do stop buying UST, it will be a glacially slow and rather quiet process. If I were you, I wouldn't be getting into the short UST trade expecting it to work this week. In fact, as last couple of weeks showed, you shouldn't get into this trade unless you have deep pockets.

Also you may wish to take into account that last week's $11bn 30y auction had 49% indirect bids (much higher than the avg of arnd 30%), which, normally, points to a strong bid from foreign central banks.
 
It doesn't affect the mkt in any predictable way, unless it causes an increase in the Federal budget deficit (i.e. they have to issue bonds to fund a Cali bailout).
 
Quote from Martinghoul:

It doesn't affect the mkt in any predictable way, unless it causes an increase in the Federal budget deficit (i.e. they have to issue bonds to fund a Cali bailout).
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Thank you very much. Im in equities but the market is watching bonds so hard right now. Easy enough for me to see how equities are feeling about it intra day. But I have no sufficient knowledge of the bond market and that could be devastating. Trying to learn, but this will most likely resolve itself before I have half a clue.
 
I've also become interested in learning about interest rate futures. Seems like these markets reflect almost everything that is going on in the world......enough to learn to keep you busy for a lifetime. Unless, of course, you think the charts say it all. Good luck. Stosh
 
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