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Stock Market: US Gov’t Debt Supply Remains Strong, Bond Markets Surge in Stride

The US government debt supply is likely to remain strong, however; the bond markets are surging in stride.

In financing the growing deficit of the government, the Treasury Department is selling more debt. This includes the reduction from the massive federal tax overhaul and spending deal. The bond yields, still, have stayed in a contracted range. This suggests that investors may not worry about the debt supply’s growth.

“There will be no relief from supply especially from bills going into October,” said Tom Simons, money market strategist at Jefferies & Co in New York.

Meanwhile, the supply is likely to stride high at least on the Treasury’s updates about its borrowing needs and might even hasten further. The Treasury is planning to sell $34 billion in notes for three years. This is along with $26 billion for its 10-year debt and $18 billion for the 30-year bonds. Further, the Treasury will also auction $51 billion in bills for three months and $45 billion in bills for six months as well as the expected $65 billion in bills for one month.

Although the supply will be experiencing fall short of a record week $294 billion set in March, it will still continue a trend higher since February. As per analysts, they see that the government is becoming strongly dependent on private investors for cash. This is amid the reduction of Fed on the holding of its bond. Meanwhile, the goal is to shrink a balance sheet that had a more than $4 trillion growth from the three great rounds of asset purchases in battling the former recession.

Stock Market: Chinese state media condemns Trump’s trade policies

On Monday, the Chinese state media condemned US President Donald Trump’s trade policies in a personal attack even they pursued to reassure investors about the health of China’s economy.

Moreover, China has strictly controlled the news outlet. These news outlets have widely criticized the United States and Trump administration as the trade tensions have intensified.

The Communist Party’s People’s Daily newspaper has recently criticized saying he was starring in his own “streetfighter-style deceitful drama of extortion and intimidation”. Further, a commentary on the paper’s front page said that the desire of Trump to invite others into playing along with his drama is “wishful thinking.” It also argued that the trade conflicts between the US and China made a “zero-sum game” in the international trade.

“Governing a country is not like doing business,” the paper said. It also mentioned that the actions of Trump jeopardized the United States’ national credibility.



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