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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (1042)	9/25/2003 5:45:07 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

< BEARX > Up three cents, yeah, it turns out to be a short fund of sorts after all. Foreign CBs keep up the recycling. Wonder if the trade imbalance might be widening even more? Reuters Foreign cen banks keep buying U.S. debt - Fed Thursday September 25, 4:35 pm ET NEW YORK, Sept 25 (Reuters) - Foreign central banks were big buyers of U.S. Treauries and agencies in the latest week, despite recent worries that a potential long-term deterioration in the dollar could prompt Asian central banks to pare their massive holdings. The Federal Reserve said on Thursday its holdings of Treasuries and agencies for foreign central banks rose a hefty $8.8 billion to a record of $968.1 billion as of Wednesday Sept. 24 compared to the prior Wednesday. The Fed also releases figures that average the daily flucations in custody holdings. The dollar came under fire earlier this week after G7 finance officials, led by the United States, sent a veiled warning to Asian central banks to stop weakening their currencies against the dollar to boost exports. That message raised worries of reduced demand from these big buyers of U.S. debt, primarily Japan and China, that could lead to sharply higher interest rates. But so far it appears the G7 message was more rhetoric than policy, and U.S. bond markets were comforted to see foreign buyers turned out in force for a new two-year Treasury note sold on Wednesday. Foreign central banks mostly bought agencies rather than Treasuries, a departure from the past few months when foreign central banks appeared to shy away from agency debt after the management shake-up at Freddie Mac (NYSE:FRE - News) in early June. Agency debt holdings rose $5.3 billion to $192.4 billion, while Treausury holdings rose $3.5 billion to $775.7 billion.