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Tag Archives: bank liabilities

TIC: The Calm (June) Before the Storm (August)

As far as recent times may be concerned, June 2019 wasn’t that bad of a month. Compared to some this year, it was downright uninteresting. Starting with the UST market, there was a plunge in yields (bad sign for global dollar shortage) in the second half of April and throughout May. June saw more steady trading which continued into July that was almost reflationary – until the Fed’s panicky “one and done” kicked off this month’s mess. The latest TIC figures now updated through the month of...

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Escalation(s) TIC

According to the US Treasury Department’s Treasury International Capital (TIC) report, foreign private holders of UST’s had been selling them steadily in the last quarter of last year. Estimates including those just released for December 2017 show a total net reduction of $24 billion. While that’s not a huge number, private overseas interests typically buy more than they sell in any given period. There are, and were, other factors to consider. To start with, it may have been related to the...

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A TIC Look At Qualitative Contraction

The latest update of the Treasury Department’s Treasury International Capital (TIC) estimates clarified a few things. To begin with, for the month of September the Chinese sold UST’s again for the first time in seven months. Between the end of January and the end of August, the Chinese had added $149.4 billion in UST holdings. In September, however, the balance was reduced by $19.7 billion. The change back to selling them wasn’t a surprise. CNY stopped rising early on in September, clearly...

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TIC For August (China’s Belgian Hong Kong Dollars)

The Chinese have been on a UST buying spree of late, having announced to the world several months into it that they were intent on keeping it going. The idea in publicly endorsing and really highlighting their official activity was as a currency policy – to stabilize CNY against its highly disruptive tendency toward devaluation (which isn’t really devaluation). How and where the Chinese are obtaining the “dollars” to accomplish this magic trick isn’t immediately clear. They are not, as they...

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TIC For August (Background)

The Treasury International Capital (TIC) report produced somewhat of an anomaly in its update for August 2017. There was a lot going on during that month, mostly as UST yields fell (even though interest rates have nowhere to go but up, supposedly) while CNY continued its blistering ascent. As to the latter, it was quite clear by then Chinese actions related to the exchange rate were being routed through Hong Kong. Before getting to Hong Kong, though, a review of the basics of the TIC report...

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Swimming The ‘Dollar’ Current (And Getting Nowhere)

The People’s Bank of China reported this week that its holdings of foreign assets fell slightly again in August 2017. Down about RMB 21 billion, almost identical to the RMB 22 billion decline in July, the pace of forex withdrawals is clearly much preferable to what China’s central bank experienced (intentionally or not) late last year at ten and even twenty times the rate of July and August. The US Treasury Department reported yesterday (TIC) that China’s registered holdings of UST’s...

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Running Out of TIC ‘Reflation’

Adding to the FOMC’s general inflation confusion about money and economy, all the major factors it is supposed to be competent about, policymakers are also having trouble figuring out why as they raise rates overall financial conditions haven’t actually tightened. According to one view, the easing of financial conditions meant that the economic effects of the Committee’s actions in gradually removing policy accommodation had been largely offset by other factors influencing financial markets,...

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‘Dollar’ ‘Improvement’

According to the headline TIC statistics, foreign central banks have in the past six months sold the fewest UST’s since the 6-month period ended November 2015. That may indicate an easing of “dollar” pressure in the private markets due to “reflation” sentiment. They are, however, still selling. In February 2017, the latest month available, the foreign official sector disposed of another $10.7 billion (net) after -$44.9 billion in January. The difference this year versus last year is that in...

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