Chinese data (MISS)+Delta>GPIF reducing UST weighting
This past weekend brought a WEAKENING China PMI picture
China matters in as far as GLOBAL growth and aggregate DEMAND as well as the provider of labor input for those global supply chains which have yet to relocate.
Meanwhile, the worlds LARGEST pension fund — Japanese GPIF (Government Pension and Investment Fund) — is said to have brought down its weighting of US bonds. The story from Bloomberg and accompanying visual caught my attention:
That picture — worth 1,000 words — was then followed by some ‘fine print’ later in the story:
...While the weighting for U.S. bonds fell, GPIF still added about 1.1 trillion yen worth of Treasuries to its holdings last fiscal year, after adjusting for currency fluctuations and bond returns, according to Bloomberg’s analysis. That took its hoard to about 17.5 trillion yen...
Basically what the story details, IMO, is the worlds largest pension system was tactically minded SELLER of RECORD LOW pandemic yields and what they have done since is, well, not yet known. I’ve got some ideas and will share in the future but for now … I’ll quit while I’m behind.
This was where we began the week and having a few (5s20s flattening trade) basis points in the back pocket, standing aside awaiting a DIPportunity of some shape / form and at the moment, being VERY frustrated by Mr (summer seasonals) Market.