China cut its holdings of Treasury notes and bonds by the most ever in June, instead favoring the debt of Europe, Japan and Korea. The move has fueled speculation that plummeting U.S. yields are driving away the Asian giant, which has ambitions for its currency, the yuan, to replace the dollar as the world's main reserve currency.
China's holdings of long-term Treasuries fell by $21.2 billion in June to $839.7 billion, a U.S. government report showed recently. Total Chinese investment in U.S. debt declined 2.8% to $843.7 billion, the smallest in a year, following a 3.6% slide in May.
The shift comes as President Barack Obama increases U.S. debt to record levels, making it harder to finance sales to sustain the U.S. economic expansion.
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GM Hires Former Microsoft CFO; French Drug Maker Buys U.S. OTC Firm; Ford Looks to Reduce Workforce by 41,000; Galleon's Rajaratnam Pleads Innocent; China Backs Out of Investment In U.S. Gold Miner; Gold Falls Amid Interest-Rate Speculation; Recovery Hopes Send Treasury Yield Curve to Record High
GM Hires Former Microsoft CFO; French Drug Maker Buys U.S. OTC Firm; Ford Looks to Reduce Workforce by 41,000; Galleon's Rajaratnam Pleads Innocent; China Backs Out of Investment In U.S. Gold Miner; Gold Falls Amid Interest-Rate Speculation; Recovery Hopes Send Treasury Yield Curve to Record High
- General Motors Co. hired Microsoft Corp. (Nasdaq: MSFT) Chief Financial Officer Chris Liddell to the same position, GM said yesterday (Monday). Liddell replaces Ray Young, who will be transferred to China as the automaker's vice president of international operations. "Chris will lead our financial and accounting operations on a global basis and will report directly to me," said GM Chairman and Interim Chief Executive Officer Ed Whitacre."We're also looking to his experience and insights in corporate strategy as a member of the senior leadership team in helping our restructuring efforts." Liddell, who already announced his Dec. 31 departure from Microsoft, will begin at GM sometime next month.
- French drug maker Sanofi-Aventis SA (NYSE ADR: SNY) has agreed to buy U.S. consumer healthcare group Chattem Inc. (Nasdaq: CHTT) in a deal valued at roughly $1.9 billion in cash, or $93.50 per share, a premium of 34% to Chattem's Friday closing price. The deal should give Sanofi a presence in the over-the-counter U.S. drug market. "It looks for me an interesting deal to generate a lot of synergies," Landesbank Baden- Wü rttemberg analyst Timo Kuerschner, told Reuters.
Rising Treasury Yields Could Trip Up the U.S. Recovery
By Jason Simpkins Managing Editor Money Morning Could rising U.S. Treasury yields blunt the economic recovery that has helped push the rates higher? Yields on U.S. Treasury securities have soared over the past six months as the U.S. economy showed signs of a rebound and as investors braced for the possible return of inflation. However, […]