Last week the amero gap surged as high as -131 basis points before closing yesterday at -108 bp. Time to order up a few more dozen crippled CF-35s 😉
This week the Fed’s own holdings of MBS were again unchanged and agencies were also flat. Treasuries, however, took a significant nose-dive reviving an all too familiar recent pattern.
This week’s Reuters report1 was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.2 Here is Doom’s updated CSV version3 of the agencies and treasuries foreign central bank holdings data set.
Foreign central banks’ holdings of Treasury Debt have now established a fresh stagnation trend. The net change from 11/17 ’10 to now (8 weeks later) stands at down $2.811 billion. Last year’s flat bit was 9 weeks long: from 12/16 ’09 to 2/17 ’10 the treasuries figure rose just $4.702 billion, after which it took flight. If you look below at the Setzer graph (especially as things unfolded after Brad went underground in mid-’09) you can easily see indications of the mighty efforts being deployed against the force of destiny. We’ll see within the next month or so if the cenbanks can once again be induced to ride to the rescue.
The Treasury Debt shrinkage was a substantial $9.123 billion.
Agencies continued it’s modest winning streak, but this week’s gain was only a trivial $0.129 billion.
*Agen-FM: The dotted line is the foreign central banks’ Agency Debt holdings reduced by the level of the Fed’s own MBS holdings. Since the FRBNY itself is a lightly audited peculiar amalgam of foreign & domestic, central and private bank I think it might be useful to consider the hypothesis that for a while starting in January 2009 the Fed’s MBS holdings were being quietly deemed to be “foreign.” That is, for the first half of ’09 the dotted line seems more sensible than the red one.
The net of US obligations held slipped $8.994 billion. This number has risen just $1.546 billion in the eight weeks since last November 17th, and we’ll have to be watching over the next few weeks how things go relative to that new benchmark standard of $3.344312 trillion.