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Mtl JP  11:29:41 GMT - 03/15/2014  
re the 100 billion US-T dump

Nobody Just Sold $US100 Billion Of US Treasuries by Matthew Boesler

Chicago LS  19:34:25 GMT - 03/14/2014  
Thanks red, missed some of the thread earlier

london red  18:36:29 GMT - 03/14/2014  
jpy. wedge building on intraday hourly/15min. if theres enough to dip below 101.20 dont think anyone will stand in way and have 101 and then 100.75 for reaction lows. below there anythings game.
on the upside have 10165 10186 10235 10250 but thats probably for next week

london red  17:57:13 GMT - 03/14/2014  
LS, would think so yes, just think source failed to provide full name in this case.

Paris ib  17:55:24 GMT - 03/14/2014  
No worries red. May I suggest that this recent move away out of FED custody of 100 billion in Treasuries can be dismissed - to an extent - but can not be construed as USD positive. The best the spin doctors can offer is namby pamby ideas about why it doesn't matter.

I have to disagree. I think it matters. A lot.

Chicago LS  17:54:39 GMT - 03/14/2014  
london red, is that piece by Marc Chandler?

Thanks much

london red  17:52:17 GMT - 03/14/2014  
my apologies ib, didnt notice. busy in the field today and trading on the move.

Paris ib  17:49:34 GMT - 03/14/2014  
red - honestly was that necessary? I posted a link to that article earlier. There was no need to post the entire thing. In any case it's all opinion, no facts.

london red  17:47:00 GMT - 03/14/2014  
apologies as taken from my phone to email and cut and pasted here, so not pretty. Source MNI

US TSYS/RESEARCH: Part 1) Brown Brothers Harriman analysts address the outsized...
US TSYS/RESEARCH: Part 1) Brown Brothers Harriman analysts address the outsized $104.5 bn decline in the Fed Tsy holdings in its custody account for foreign central banks. "Custody holdings have trended lower this year, but the large, possibly record decline, is worth more attention than the market is giving it," they say. The drop "plays into market talk that China has stepped up the diversification of its reserves and could help explain the euro's persistent strength." This could be possible, but seems unlikely given that China has other pressing financial issues currently. Also, "some may try to link this to Russia's recent threat - this would reflect almost half of Russia's dollar reserves and would seem significant," they say. BBH reminds however that Russia's trade and FX policy is tied to the dollar. Russia "does not hold dollars as a favor to the US," but because it is in the country's best interest.
"If it is Russia, we wonder if would not be a sale of Treasuries as a transfer from the Fed's custodial account to commercial banks," the analysts say.

Source: Market News International (MNI) – A Deutsche Börse company

14-marca-2014 14:27:30

US TSYS/RESEARCH: Part 2) Brown Brothers Harriman's Marc Chandler notes also...
US TSYS/RESEARCH: Part 2) Brown Brothers Harriman's Marc Chandler notes also that the $104.5bn drop in weekly Fed custody holdings of Tsys by central took place in a week where there was not much change in interest rates (10-yr yields closed at 2.725% March 12 and 2.696% March 5). "...Regardless of who sold them and for what purposes, the point is that the trend decline in Treasuries being held for foreign accounts at the Federal Reserve has not coincided with higher US yields," he says. The $104.5bn decline, in the latest reporting period, "did not see Treasury yields rise, which is a testament to the breadth and depth of the market," he says. More importantly, "it also means that a foreign country's (such a Russia) ability to impact US policy by threatening to sell its Treasury holdings rings hollow," Chandler says.

Paris ib  17:39:31 GMT - 03/14/2014  
red you think you'd find someone in the U.S. who would write an article which suggests that real divestment from the U.S. is going on even or could go on? I don't think so.

The U.S. is dependent on foreign capital inflows. That's a fact. Any suggestion that those inflows could stop or - worse - reverse is dynamite. Should China and Russia choose to retaliate during current hostilities by repatriating funds - that would leave the U.S. in a very precarious position.

The removal of 100 billion in U.S. Treasuries from FED custody in one week - a record by the way - can not be so easily dismissed. No-one knows what happened exactly or why. You can make the case though that it is a negative for the U.S.

london red  17:26:55 GMT - 03/14/2014  
russia invests in US bonds because its good business not because its doing a favour for the US. Good article by Brown Bros Harriman on subject on the wires today and on how Russia's actions make no difference.

Paris ib  16:58:46 GMT - 03/14/2014  
Who knows? Gold? It's neutral, physical. European bonds? Their own bonds.... the options are endless.

GVI Forex john   16:57:18 GMT - 03/14/2014  
Speculation is that it was the Russians who pulled out the $100bln for fear of sanctions. Is this where the EUR demand came from? Where else could they place it?

Paris ib  16:51:37 GMT - 03/14/2014  
The FOMC meeting coming up is the next focus. Tapering is expected to continue but who really cares if the FED buys USD 5 billion less in Treasuries per month or NOT. When you consider that 100 billion in Treasuries were taken out of FED custody in just one week?

Financial response in Russian markets is happening. It would be interesting to know who is behind those moves. Has the conflict ALREADY moved into the financial arena?

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