"Falling Knife or Attractive Opportunity? Uncertain Outlook on US Treasuries"

"Chinese Investors Reducing US Treasury Holdings"
Revealed in Deutsche Bank Interview
Alternatives Include High-Quality European Bonds, Japanese Government Bonds, and Gold

US President Donald Trump signs an executive order at the White House on the 17th (local time) allowing commercial fishing near islands in the Pacific. Photo by UPI

Global investment bank Deutsche Bank has reported that Chinese investors are reducing their holdings in the US Treasury market and purchasing European bonds.

Lillian Tao, Head of China Macro and Global Emerging Market Sales at Deutsche Bank, said in an interview with Bloomberg News on the 18th that "some Chinese investors are moving away from US assets and diversifying their portfolios," adding, "Interest in other markets, particularly in Europe, has increased."

Tao noted that, regarding Chinese corporate clients' overseas investments, "high-quality European bonds, Japanese government bonds, and gold could be chosen as alternatives to US Treasuries."

The US Treasury market, valued at $29 trillion and considered a global safe asset, has recently faced severe selling pressure. After US President Donald Trump announced reciprocal tariffs on all countries on the 2nd, large-scale selling continued in the US Treasury market, and on the 9th (local time), the yield on the 10-year US Treasury briefly approached 4.5%. In response, President Trump reversed his stance by suspending reciprocal tariffs for 90 days, except for China.

Although the reciprocal tariff suspension helped restore some stability, the US Treasury market remains a source of concern for investors. Overnight, the 10-year yield closed at 4.32%, up 5 basis points (0.01 percentage points) from the previous trading day, while the 2-year yield, which is relatively sensitive to monetary policy, ended at 3.80%, up 3 basis points.

Tao stated, "Some Chinese clients see current US Treasury levels as very attractive," but also noted, "Given that US policy is becoming increasingly unpredictable, they are extremely cautious about whether this is a good buying opportunity or a falling knife."

This content was produced with the assistance of AI translation services.