EUR, China, Treasuries: Levels, Ranges, Targets

From last available TIC data in Oct 2017, China’s Treasury holdings in Billions remain as stable as ever over many, many years. Current Treasury holdings in Billions are 1189.2, up from 1049.3 in November 2016. Japan is the next largest holder of Treasuries and again nothing changed over many years. China and Japan were always the largest holders of Treasuries. Dating to 2008, China and Japan holdings barely moved.

Japan holdings are in Billions 1093.9, up from 1090.8 in December 2016. Of the 34 nations as holders of Treasuries, in Billions 6349.4, up from 5953.0 in November 2016. Of the 34 nations, T Bills account for in Billions 332.2 and 3746.9 in Bonds.

The United States holds $9.9 trillion in Foreign Securities as of End 2016. In Equities are $7.1 trillion, $2.4 Trillion in Bonds and $0.3 trillion in short term bonds. The next annual and Quarterly reports are due Jan 18.

China is a fake news report concocted by market participants to waste a day. The real story to Treasury holdings are found from purchasers in the Cayman Islands. The Cayman Islands as a nation category was added in 2016 and today accounts for in billions 269.9 , up from $250.4 billion in March 2017. Purchases increased steadily over the past nearly 2 years. The Cayman Islands must be analyzed as Venezuela, Iran, Cuba, Hezbollah and other American enemies.

Outside China and Japan, no nation of 34 represents a threat nor ability to move Treasury yields in a significant way. Yet China lacks ability overall. The 10 year Volume reported by the CME at 362, 182 for the March Contract. In $ terms, that’s 1,810,910,000.0

China’s Trade Deficit with the US for all 2017 in Millions is Minus 344, 419.3 while China’s Goods deficit for 2016 ran Minus 347, 016.0, up from 367 in 2015.

China’s threat to America and the world is not only its intelligence and patience but Gold Holdings at 59.24 million ounces and equates from 1300 to $77, 012.0. Treasuries overall are a small story to Gold Holdings.

USD/CNY Correlates to DXY and negatively correlates to EUR/USD. Positive Correlations explains why USD Gold and not Gold in EUR terms.

Monday was EUR and CFTC data. By Thursday, the info is meaningless and disappeared. Currencies in Futures contracts trade Money supplies and explains the CFTC data as the ECB reports weekly money supply data then CFTC weekly reports fall in line to overall money supplies. If contracts are factored to Money supplies, the CFTC data is quite small yet reveals little to an overall EUR trade.

EUR/USD break points 1.1998, 1.2052 and 1.2130 Vs 1.1852. Break 1.1852 then far lower goes EUR.

USD/JPY break Points 111.17, 111.36, 111.79 and 112.45. The 200 day average is located exactly at 111.95.

AUD/USD Break Points 0.7842 and 0.7941.

GBP/USD 1.3466 and 1.3364.

 

Brian Twomey  btwomey.com brian@btwomey.com

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