U.S. Treasury studying ultra-long bonds, demand queried
The U.S. Treasury said on Wednesday that it is studying the possibility of issuing ultra-long-term bonds a day after its advisory committee questioned investor enthusiasm for such a change. In its quarterly refunding statement, the Treasury also said it will keep coupon auctions steady in the upcoming quarter and would auction $62 billion in coupon debt next week. Yields on long-dated Treasuries slipped after the announcement as some investors had expected the department to increase the issuance of longer-dated securities. U.S. Treasury Secretary Steven Mnuchin said in a Bloomberg Television interview on Monday that his department was looking at ultra-long-term bonds, or those with maturities of more than 30 years. “We have a working group looking at it,” Mnuchin said. “We think that it’s something that could absolutely make sense for us at Treasury.” An ultra-long bond would fit in with the Treasury’s objective to fund the government at the least cost over time.
China to further regulate local government debt issuance and financing
China will further regulate local government debt issuance and financing, six government agencies said in a joint statement on Wednesday, reinforcing recent steps to bolster financial risk controls. China has taken aim at potential cracks in its financial system, ramping up regulatory checks with various high-flying officials calling for action against an alarming level of leverage. In the statement, the government agencies, including the National Development and Reform Commission, the finance ministry, the central bank and securities and banking regulators, said China would push for a clearer boundary between local governments and their financing vehicles. Local governments are strictly prohibited from injecting public assets into local government financing vehicles), or using expected land revenue as debt repayments for LGFVs, the statement said.
German unemployment falls more than expected in April
May 3 German unemployment fell more than expected in April, data showed on Wednesday, in a further sign that the robust labour market will continue to boost domestic demand and support growth in Europe’s largest economy. The seasonally adjusted jobless total fell by 15,000 to 2.543 million, the Federal Labour Office said. That was more than the predicted fall of 12,000 in a Reuters poll. The adjusted unemployment rate remained at 5.8 percent, the lowest level since German reunification in 1990. “With the continuing spring recovery, the number of unemployed people again fell significantly in April,” Detlef Scheele, head of the Federal Labour Office, said in a statement. “The positive development on the labour market continues.”