The slide was attributed to the "inverted gap" in rates for short- and long-term US Treasury bonds
, which was taken as a warning that normally precedes a recession.
The first tranche included five-year bonds worth $2bn -- pricing 90 basis points over US Treasury bonds
on five-year bonds.
Although the supply of safe assets remains steady, it is increasingly concentrated in US Treasury bonds
. The proportion of overall supply of Aaa-rated government bonds is on a par with 2008 levels, despite central bank purchases and a deterioration in sovereign credit quality.
The first tranche included five-year bonds worth $2 billion -- pricing 90 basis points over US treasury bonds
on five-year bonds and the second tranche for 10 years' worth $4 billion - was 135 basis points over US treasury basis points, while the third tranche was for 30 years worth $6 billion, 175 basis points above US treasury bonds
This means German Bunds will outperform US Treasury bonds
as the ECB opts for easy money while the Federal Reserve is forced to "tighten".
In Beijing on Thursday, Chinese Foreign Ministry spokeswoman Hua Chunying said China e welcomes the US progress in dealing with the issue, saying, "As the world's largest economy, the proper settlement of the issues works for US interests and benefits world economic stability and development." As of July 31, China held USD 1.277 trillion in US Treasury bonds
and Japan held USD 1.135 trillion, according to the US Treasury Department.
During the last debt-ceiling crisis, S and P downgraded the US government credit rating from A to +, which impaired investor confidence in US Treasury bonds
and Kali warned that current crisis could cause similar reaction.
In fact, the greenback strengthened as investors seeking a safe haven rushed into US Treasury bonds
. A year later, when Lehman Brothers failed, the dollar benefited from the safe-haven effect yet again.
SLEUTHS from the income tax ( I- T) department along with a CBI team are grilling the smalltown businessman from whom US Treasury Bonds
with a face value of $ 5 billion ( ` 27,240 crore) were seized on New Year's eve on the outskirts of Dharapuram near Coimbatore.
Contributing to last year's contraction was a rally in US Treasury bonds
, which benefited from safe-haven flows as Europe's debt crisis simmered, as well as central bank buying both at home and abroad.
In July the UAE Central Bank announced that it does not own any US Treasury bonds
or government financial instruments.