www.marketwatch.com/story/...bt-says-deutsche-bank-2020-06-02
China may sell Treasurys, but that doesn’t mean it’s ‘weaponizing’ its more than $1 trillion hoard of U.S. debt, says Deutsche Bank
Tensions between Washington and Beijing are flare up, feeding worries that policy makers in China might use its more than $1 trillion hoard of Treasurys as financial leverage against the U.S.
Those concerns may intensify if China continues to gradually sheds its holdings of U.S. debt. But Deutsche Bank analysts warn investors not to mistake a slight pullback from China as a sign that Beijing is scrambling for ways to retaliate against the U.S., which has been ratcheting up its pressure on the world’s second-largest economy, over its handling of the COVID-19 pandemic, among other issues.
“We interpret the bilateral U.S./China rhetoric as just that, motivated more by domestic political considerations than a rational attempt to re-engineer global capital flows,” said Deutsche Bank analysts in a note last Friday.