Be disgusted! Global central bank to sell hedge assets, but because the Fed – Sohu Finance sichen

Be disgusted! Global central bank selling hedge assets, was because the Fed – Sohu Financial Review: a period of time, global investors are selling Treasuries, which the central bank is starring. Analysts believe that, in the absence of the Fed’s policy with the global central bank, the U.S. dollar shortage caused by the high exchange rate hedging costs are too high, investors are forced to leave. For a long time, US government bonds have been held as safe haven assets, but they are now facing a major crisis: being sold. The United States government bonds overseas demand fell, the past 12 months, the central banks outside of the United States to sell up to $335 billion of Treasury bonds. Although the yield gap between US government bonds and other national debt is at its highest, the global dollar shortage and exchange rate risk are driving investors away from the asset. In fact, the reason behind the lack of income is not the long end of the income compression: the United States and other countries in the world between the interest rate has remained stable. But the implicit global dollar shortfall emerged a few months ago, but the situation has become even worse in the months after the dollar’s hedge costs and short-term financing costs soared. Analysts believe that the reason is a departure from the central bank policy (cut the Fed rate hike VS elsewhere) to expand and cross currency basis (use futures to hedge the cost is higher than the interest rate parity, etc.) allows investors to hedge the cost becomes very expensive. In general, international investors have flocked to the U.S. fixed income bonds in order to seek benefits in the era of negative interest rates. It is very popular and necessary to use short-term forward contracts to eliminate foreign exchange risk. Now, however, it is no longer profitable to buy another 10 – year treasury bond after hedging risks. Not limited to European or Japanese investors, almost fixed income investors to buy U.S. Treasury bonds are not profitable. Deutsche bank analyst George · Shaarawi North said that in the current financial environment can get three conclusions. First of all, U.S. dollar denominated bonds and other fixed income bond funds attracted the scene or it is difficult to maintain before the event, unless other currency bond yields appear negative growth (now only zero growth), shrinking degree could limit U.S. bond yields. Second, the increase in futures costs prompted the dollar bullish. If investors want to obtain AAA rate of return, they will have to do this will generate demand for dollars hedging; if investors do not want to bear the foreign exchange risk, that they will have to buy higher yielding corporate bonds or other higher risk assets in the us. Finally, the cross monetary base and the short end of the United States can prove that the driving force of global capital flows have changed. On the one hand, the expansion of the cross monetary base is essentially a kind of "tax" that distorts the global capital flow". The Fed’s tightening policy will make the cost of hedging foreign currency more expensive, counter intuitive forced investors to increase rather than reduce foreign exchange, credit risk or duration.相关的主题文章: