Institutions buy long debt power less fed or overweight repo

Hu Yu The effect of the Fed's purchases of long-term treasuries is being questioned. "The current market situation, the effect of rising long-term interest rates is tantamount to interest rate hikes 1 May 18, a US bond market investor pointed out that despite the 300 billion dollar long debt repurchase plan has been carried out One-third, but the 10-year Treasury bond prices have started to continue to fall, the agency holding long-term debt is not enough motivation,　　Investors can only hope to add a new repo size after the Fed's June meeting. Foreign investors in March increased their holdings of long debt May 18, investors in some bond markets found that the March International capital Flows Report (TIC), released by the US Treasury on 15th, was far from what they had expected: "A net outflow of 91.1 billion U.S. dollars at the end of February, with a guess that the end of March may still be a net outflow, but the amount will be higher"　　The reality is that international capital is rapidly pouring into the United States.　　According to the report, the United States at the end of March net inflow of capital of 23.2 billion U.S. dollars, of which the official 13.5 billion U.S. dollars, private 9.8 billion U.S. dollars, which significantly increased the purchase of medium and long-term Treasury bonds (Treasury Bonds & Notes) funds. To reduce the interest rate on long-term debt, the Federal Reserve announced on March 18 a total of 300 billion U.S. dollars in the purchase plan.　　Public data show that the Fed has used about 100 billion dollars to buy back long-term Treasury bonds. "Although the Fed itself did not buy much in March, a large number of institutions have followed suit to buy long-term bonds."　　Said Sheijian, Bank of communications financial markets. The report shows that international capital through official channels in February 2009 to reduce the long-term government debt of 2 billion U.S. dollars, March increased by 29 billion U.S. dollars, unofficial purchases of long-term treasury bonds from February to 23.5 billion U.S. dollars to March 26.3 billion dollars.　　International Capital holdings of short-term government debt from the end of February to 68.3 billion U.S. dollars, reduced to 47.9 billion U.S. dollars. As the largest holder of US Treasuries, China held US Treasuries at the end of March at $767.9 billion, an increase of $23.7 billion from February.　　Of these, the short-term debt is 191.158 billion dollars, accounting for 24.9%.　　喻璠, of Citic Bank's Market Analysis department, said the structure of countries holding US Treasuries was affected by the US Treasury's distribution structure. In the fourth quarter of 2008, the Treasury issued more than 80% of Treasury bonds for short-term bonds, while the recent issuance of bonds is short-term bonds, 2-5-year bonds, 5-10-year bonds accounted for One-third, and 10% more than 10-year bonds. "In the face of balanced debt pressure, the future of US Treasuries will be prolonged, which will change the outcome of central banks ' future holdings of U.S. debt."　　"喻璠 said. The rebound in corporate and institutional debt Sheijian that the US may not continue to maintain a net capital inflow in 4 May, "The price of bonds rose in March, when Treasury prices rose at a time in the run-up to the repurchase plan, but the yield on long-term Treasury bonds began to rise in April, showing greater selling pressure." "May 15, 10-year bond yields rose 4 basis points to 3.13%, highThe 30-year bond rose by 2 basis points to 4.08% in March, at a low point (2.5%) of 37, and it hit 4.35% on May 8. TIC also showed that international capital in March to reduce the corporate debt of 2.5 billion U.S. dollars, less than February reduction of 1 billion U.S. dollars, reducing institutional debt of 900 million U.S. dollars, compared with February reduction of 1.1 billion U.S. dollars. China continued to reduce its institutional debt: at the end of March, China held a long-term institutional debt of 492.995 billion U.S. dollars, less than the end of February to reduce the 390 million U.S. dollars, less than the beginning of the 4.3 billion U.S. dollar reduction.　　Meanwhile, China held long-term corporate debt at the end of March at $27.78 billion trillion, more than $18 million in late February. "It is likely to be well affected by the economic expectations that corporate debt has fallen markedly in the past half month and that the future is likely to continue slowly."　　"Sheijian said. The current two-year institutional and bond spreads have narrowed to 30 basis points, while corporate bond yields have fallen by 10-20 BP since early May. "The yield on institutional debt is relatively high, and we will increase our institutional debt, but mainly two-room bonds," a big domestic bond trader said 15th. "But the signs of good economic growth are uncertain. "Recent economic data have been repeated, and the worst of the financial sector may be over, but other sectors still need to be seen."　　"喻璠 that the U.S. holdings of U.S. Treasury bonds by the nature of foreign exchange reserves, although corporate debt and institutional debt rebounded more, but the institutions of the credit market cautious optimism, the future will be to increase holdings of national debt mainly." or increase the amount of long-bond repurchase lines There is market opinion that, given the amounts raised this year for the economy and the banking system, worries about the supply of US Treasuries have surfaced.　　But there are also institutions that change the bond market will not have much impact on China's foreign exchange reserves. Peng Wensheng at, head of research at Barclays Capital China, said the change in the US bond market would not have much impact on the management of China's foreign exchange reserves, and China had already begun diversifying its investment strategy.　　CICC's recent macroeconomic report said the huge supply of Treasuries would not bring absolute and continuing pressure on the dollar, and that the U.S. government's demand for financing from abroad has been growing as the US current account deficit continues to shrink　　The Treasury, which issued about $1.9 trillion trillion in the first three fiscal quarters, expects the Treasury to issue $2.3 trillion trillion of bonds by the fiscal year ending September 2009. This is in line with Deutsche Bank's recent rise in total debt issuance.　　Deutsche Bank believes that the U.S. government this week will announce the issuance of 40 billion, 36 billion and 28 billion dollars of 2-year, 5-year and 7-year bonds respectively. The real worry for investors is the rising long-term interest rate. "The amount of the long bond repurchase has been used One-third, but the interest rate has been renewed and the effect of the repurchase scheme has been discounted." "One market participant said," 30-year mortgage rates from the 4.85% low point back to 5% above, is clearly not conducive to the housing market recovery. "The Bank of England's decision to buy a long debt earlier than the United States has decided to purchaseThe purchase amount was increased from 75 billion pounds to 125 billion pounds. The Fed is likely to announce an increase in its long debt repurchase quotas after the June conference.