Analysts: Under the threat of tariffs, U.S. overseas lenders may also choose to reduce their holdings of U.S. debt

April 10 news, the recent US bond shock affected the global financial marekt, trillion US bond basis trading rapid positioning squaring led to violent rise in yields, 10-year and 30-year US bond yields rose more than 50BPs in three days. Market participants said that multiple factors triggered the "collapse" of this round of US debt: hedge funds' large-scale clearance of US debt positions was the main reason, and investors' strong demand for cash-based instruments triggered a large-scale basis trading activity. At the same time, in the face of the huge uncertainty caused by the tariff impact and the rapid depreciation of the US dollar, some foreign capital may choose to "take the opportunity" to withdraw. In addition, factors such as the dislocation of the US swap market and the rumored "interest tax" on US debt are also contributing to the fire. As of the end of 2024, the net investment of overseas officials and individuals in US financial assets has reached 26.20 trillion US dollars. "Under the background of the tariff threat, US overseas creditors may also choose to reduce their holdings of US debt," said Bai Xue, senior associate director of the research and development department of Oriental Jincheng. A trader at an internationally renowned investment bank in Hong Kong believes that "the current US bond issuance situation shows that foreign capital has not used the'lethal option 'of selling US bonds. Recently, more local funds have left the market to wait and see, but many of them are fixed income investors out of fear of the possible withdrawal of foreign capital in the future, and then clear part of the US bond holdings in advance."