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China labels Bloomberg report on stopping debt purchases as ‘fake news’

by | 11 Jan, 2018

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Will China stop buying American debt?

Global bond markets are rebounding today after Chinese officials sought to soothe investors over a report from Bloomberg that they dubbed as ‘fake news’.

Yesterday Bloomberg news reported that China was considering halting purchases of American debt. The piece caused the Dollar to fall while US bond yields rose.

Today the Asia Times among other outlets rebuked the report, saying: “First, the story is less than unattributed. It doesn’t even cite sources at a particular state institution. Second, China doesn’t signal major policy changes through American news organizations that it previously has kicked out of the mainland. It does so via Chinese-language state media and not a whisper of a policy change appeared from there.” In a quick jab the piece added: “It must have been a slow news day.”

China’s State Administration of Foreign Exchange said Thursday that the report “might have cited wrong sources or may be fake news.” As China is the biggest holder of US debt (to the tune of $1.2 trillion), and the US government uses Treasurys to help finance itself, the report was met with anxiety, and comes at a time when the future relationship between the two superpowers is uncertain with Trump at the helm.

The US President appears poised to counter China on its massive trade surplus with America, while the administration is also appearing to lose patience with China’s reticence to reign in the North Korean regime.

Related: China as America’s banker

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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