Reuters is reporting that China has been given the special privilege of direct bidding at Treasury auctions.
The Treasury releases data on direct and indirect (through primary dealers) results. Analysts long assumed that large indirects were a sign of Chinese takedown but those numbers were/are now useless.
Now that the cat’s out of the bag, expect other creditors to ask for the same. The only real takeaway is that dealers now have one fewer client to front-run.
Interestingly, the bond market has hardly moved amidst today’s stock rally which tells me it’s a fakeout. Analysts are expecting strong Treasury auctions this week (2s, 5s, 7s) which could hurt USD/JPY.