Mizuho: "Pretty High" Confidence Data Will Show China Dumping US Treasuries

Mizuho believes it's highly probable China is selling US Treasuries. This suspicion arises amid speculation that China aims to weaken the dollar, raise yields, and support the yuan. Delayed data reporting currently prevents confirmation of these actions. Extreme tariffs and potential reciprocal measures force Asian central banks to defend their currencies. The renminbi's stability despite economic shocks suggests currency smoothing. Such smoothing likely involves selling US Treasuries to fund FX intervention. Mizuho anticipates confirmation of China's actions from future data releases. Rochester was surprised by the dollar's weakness despite tariff exemptions. This dollar weakness and falling US rates is a concerning combination. It aligns with the theory that China is actively selling US debt. The article references Tyler Durden and his insights from a previous week.