China Rethink on Treasuries Is Echo of Premier’s 2009 Worry
China’s showing once again that it’s not afraid to wield the clout of its hoard of Treasuries to catch the attention of U.S. officials and the world’s biggest debt market. But as in a previous episode in 2009, such warnings may prove hollow. Senior Chinese government officials have recommended slowing or halting purchases of Treasuries, in part given trade tensions with the U.S., according to people familiar with the matter cited by Bloomberg News Wednesday — news that wound up having little lasting impact on trading as yields ended little changed after spiking to the highest since March. China’s State Administration of Foreign Exchange said in a statement Thursday that the story “might have cited wrong sources or may be fake news.” It said investments in Treasuries are decided by market conditions. Almost nine years ago, at a time when yields were already heading higher and the U.S. was issuing a record amount of debt to finance stimulus measures, then-Premier Wen Jiabao added fuel to the selloff by saying he was “worried” about the safety of the securities. Weeks later, China’s top foreign-exchange official said the nation would keep buying Treasuries.
Euro Gains on ECB Minutes as Stocks Dip; Oil Rises: Markets Wrap
The euro jumped after minutes from the European Central Bank’s December meeting, weighing on stocks in the region as investors struggled to put Wednesday’s turbulence behind them. U.S. equity futures rose, Treasuries steadied and oil hit a three-year high. The single currency headed for a second day of gains after the minutes showed guidance on future actions will change slowly. The Stoxx Europe 600 Index nudged lower, while U.S. futures pointed to slight rise at the open. The yield on 10-year U.S. Treasuries declined after China said a Bloomberg report on officials having recommended slowing or halting purchases of the securities might have cited a “wrong source.” The dollar erased an earlier advance and the British pound extended its retreat for a fourth day. While traders have tried to shake off some of the concerns that led to Wednesday’s declines, they’re still struggling to find fresh reasons to extend a rally that took global stocks to or near record highs earlier this week. A string of earnings releases starting with JPMorgan Chase & Co. and Wells Fargo & Co. on Friday might offer them more direction.
Jobless Claims in U.S. Rise to Three-Month High After Holidays
U.S. filings for unemployment benefits unexpectedly rose to a three-month high last week during a holiday period when claims tend to be volatile, Labor Department figures showed Thursday. Even with the latest increase, claims remain low by historical standards, with levels below 300,000 seen as indicating a healthy labor market as companies remain reluctant to fire workers. Last week included the New Year’s Day holiday and followed the week containing Christmas, which tend to generate fluctuations in filings due to seasonal positions and difficulties adjusting for them. At the same time, further increases in jobless claims could suggest that labor-market progress is hitting bumps. A report last week showed that U.S. employers added fewer jobs in December than economists had penciled in, amid a drop in retail positions.