Board-Ansicht
Mix-Ansicht- Hedge Funds Step In To Buy U.S. Debt Securities - CRASH_GURU, 24.11.2004, 16:19
Hedge Funds Step In To Buy U.S. Debt Securities
-->Hedge Funds Step In To Buy U.S. Debt Securities
By AGNES T. CRANE and MICHAEL SCHROEDER
The Bank of Japan, which executes financial transactions on behalf of the Ministry of Finance, had been a major force in the currency markets last year and the first quarter of 2004 as it attempted to prop up a sagging dollar and stop a strong yen from derailing the country's economic recovery.
By extension, Japan's central bank became a major driver of demand for Treasurys, particularly during auctions, as the financial authorities sought to recycle dollar proceeds from interventions into their preferred investment vehicles, U.S. government debt, which also includes agencies.
After selling a record 14.83 trillion yen, or around $140 billion, in the first 2½ months of 2004 in an attempt to keep the dollar from falling below 105 yen, the Bank of Japan abruptly pulled out of currency markets in mid-March. Analysts reckon the central bank has continued to buy Treasurys by tapping cash deposits that held excess dollar proceeds from previous interventions. Those deposits fell to about 15% of total official reserves, the historical norm, by the end of August. At the peak, cash deposits represented about 22% of total reserves.
Analysts, therefore, believe the days of massive Bank of Japan purchases of Treasurys are over
Hedge funds have now stepped in to buy Treasurys in September as Japan trimmed its holdings for the first time since October 2002.
That development is evident in the latest Treasury Department data on foreign holdings of government securities, which show strong growth in a category called"Caribbean Banking Centers." The category primarily includes hedge funds, analysts say. Those within the grouping boosted Treasury holdings by $9 billion in September to $100.3 billion.
Meanwhile, foreign interests, longtime investors in Fannie Mae, appear to be shunning the mortgage giant's bonds following its accounting woes. Net foreign purchases of U.S."agency" debt, which includes Fannie Mae, slid to $956 million in September from $21.2 billion in August, the lowest level in a year.
The hedge funds' Treasury buying is part of a broader trend, in which the Caribbean Banking Centers category of foreign buyers has nearly doubled its Treasury investments in the past 12 months to become the fourth-largest holder of U.S. government debt.
Analysts say the figures contain insights on existing or emerging trends and provide much-needed context to a bond market that continually has defied expectations this year.
The other notable development in the Treasury data was purchases by Caribbean Banking Centers. Some analysts argue the category should be stripped out of the Treasury data on foreign flows, since domestic hedge funds with offshore accounts are thought to constitute the bulk of this category.
David Ader, bond market strategist at RBS Greenwich Capital in Greenwich, Conn., said it appears"the hedge funds were making a bullish bet" on the direction of rates in September.
While the $9 billion in Caribbean purchases isn't the largest monthly increase posted by the group, Mr. Prophet said"this is the first month in which it's distorted the Treasury data," given the falloff in Japan's holdings and the more moderate $2.1 billion increase in China's coffers. China is the second-largest foreign presence in the Treasury market, after Japan.
Thread gesperrtgesamter Thread:
