The global macro strategy team, led by Morgan Stanley analyst Matthew Hornbach, wrote in a report over the weekend that the U.S. Treasury market has fallen cheap enough that the historic bear market in U.S. Treasuries over the past year has entered yields enough to compensate for the risk. Investors can already see the value of U.S. bond yields appearing, and it is recommended to wait for the right time to buy in order to obtain a clear term premium.
On the other hand, the size of U.S. Treasuries surpassed the $31 trillion mark for the first time earlier this month, setting a record high, but Matthew Hornbach’s team wrote a report earlier this month that if anyone because of the growing size of U.S. Treasuries, major investors It would be a big mistake to worry about bond yields because of reduced demand.
Matthew Hornbach believes that the size of U.S. government bonds exceeding $31 trillion is just a disturbance, and the change in the level of demand for U.S. government bonds by large investors such as foreign central banks is just another disturbance. He emphasized that the level of U.S. government bond yields mainly depends on the Federal Reserve. The CBRC’s monetary policy, fiscal and overseas monetary policies play a supporting role.
In response to the size of U.S. government bonds exceeding $31 trillion, Morgan Stanley said disapprovingly: The size of U.S. government bonds will soon reach $32 trillion, then $33 trillion, and $45 trillion in 10 years, but for macro investors, the question is not who will buy these bonds, but at what price?
Morgan Stanley mentioned that since 2010, the experience of foreign demand for U.S. government bonds and other trends shows that even large investors will not affect the overall yield level; therefore, it is recommended that macro investors should pay more attention to central banks policy and response, economic data, not the total amount of government bonds investors need to buy, or which investors will buy.
Cryptocurrency funds enter the U.S. bond market
Recently, many funds in the currency circle are entering the U.S. government bond market. MakerDAO announced this month that in order to diversify its capital reserves and reduce the risks brought by a single asset, it has decided to allocate $500 million to purchase U.S. short-term government bonds and investments. Grade corporate bonds, with assistance from asset management giant BlackRock.
Justin Sun, the founder of Tron, has been discovered recently. Since May 12, he has transferred 2.36 billion USDC to Circle. Cryptocurrency analyst Alex Krüger speculates that Justin Sun is withdrawing from DeFi and turning his funds to invest in U.S. government bonds, because U.S. Treasuries now have higher yields and lower risk.
Market
BTC once rose by more than 2.6% to US$19,695 within 5 hours since the early morning of yesterday, but then fell back and continued to fluctuate around US$19,000. As of the deadline, it was reported at US$19,287, down 0.7% in the past 24 hours.ETH was reported at $1,340, down 1.1% in the past 24 hours.
U.S. stocks continued their gains on Friday. The Dow Jones Industrial Average rose 417.06 points, or 1.34%, to close at 31,499.62 points; the S&P 500 rose 44.59 points, or 1.19%, to close at 3,797.34 points; the Nasdaq Composite rose 92.89 points, or 0.86 %, to close at 10,952.61 points; the Philadelphia Semiconductor Index rose 14.86 points, or 0.64%, to close at 2,351.55 points.
Post time: Nov-14-2022