Archived IMT (2009.03.26)

China's worries with escalating US debt are not just limited to the dollar but also with the falling value of the US treasuries, as seen in the 30-40% rise in the yield of 3, 5 and 10-year Treasuries year to date. USD outlook remains especially shaky by the fact that despite the Feds purchasing $300 billion in LT Treasuries, a 1/3 of that was sold this week alone. Thus, downward impact on yield may not be prolonged. In fact, Last weeks over 2/3rds of last weeks 40-50-bp plunge in bond yields has been reversed. The bond-dollar impact remains a double whammy for the fate of +$700 billion of Chinas US Treasuries. Chinas concerns may not consist a threat to sell, but are sufficient for maintain dollar-aversion in global currency markets.