Posts Tagged ‘United States Treasury security’

Auction number HY39 of government debt securities was a uniform price auction for IQD 100,000,000,000 par value of bills which  concluded on 16-04-2012.

Total public  IQD 170,400,000,000 Valid competitive bids totaled IQD 168,400,000,000 and valid non competitive bids totaled IQD 2,000,000,000 and The cut off yield (the highest yield of a successful bidder) determined by auction was 5.80%. (more…)

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The auction No. C52 for Central Bank of Iraq bills based on a uniform price auction for IQD 150’000’000’000 par value was concluded on the 14-2-2012.

The total public bidding is IQD 426’000’000’000 and the cut-off yield (the highest yield of the  successful bidder) determined by the auction was 5.30%. (more…)

While the downgrade of Unites States government debt by Standard & Poor’s shocked global financial markets, China has more reason to worry than most: the bulk of its $3.2tn in official foreign reserves – more than 60 per cent – is denominated in dollars, including $1.1tn in US Treasury bonds.

So long as the US government does not default, whatever losses China may experience from the downgrade will be small.

To be sure, the dollar’s value will fall, imposing a balance-sheet loss on the Peoples’ Bank of China (PBC, the central bank). But a falling dollar would make it cheaper for Chinese consumers and companies to buy US goods. If prices are stable in the US, as is the case now, the gains from buying US goods should exactly offset the PBC’s balance-sheet losses.

Read more: http://english.aljazeera.net/indepth/opinion/2011/08/20118217551162510.html

KUWAIT CITY, Aug 10: Previously what was thought unthinkable happened. On 5 August 11 evening, Standard & Poor’s lowered the U.S. long-term rating by one level to AA+, while keeping the outlook at “negative” as the agency becomes less confident that Congress will end Bush-era tax cuts or tackle entitlements. S&P also said the U.S. rating may be reduced to AA within two years if spending reductions are lower than agreed to, interest rates rise or “new fiscal pressures” result in higher general government debt.

GCC & World Indices – Day 1 Impact
All the GCC indices retreated as the markets opened after their respective weekend. While TASI had a 5.5% fall on Saturday, a similar story was repeated for other GCC indices on Sunday when they opened with DFMGI falling by 3.7%, ADSMI and DSM falling by 2.5% each, Oman 1.9%, Kuwait 1.6% and Bahrain 0.3%. Ditto was the case with Asia, Europe and US markets when they opened on Monday.

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  • الأسواق العالمية تنتظرها خسائر قياسيةConfirmed that the global economy threatened to collapse .. And the dollar is no longer a safe haven
  • Experts call quickly revalue the riyal and the diversification of Saudi investments

August 7, 2011

World markets await record losses
Saudi economists emphasized that the world lost a dollar as a safe haven assuring dealt with over the decades as well as gold in the event of any economic turmoil, and after agencies cut credit ratings mark the public debt of the United States yesterday.

Economists said that the positive results achieved by the Saudi riyal and the national economy over the decades by its association with the dollar is no longer available today, calling for the rapid re-evaluation of the riyal exchange rate, and proceed immediately in the distribution of Saudi investments in more than a basket rather than in one basket is a basket of America “worn”.

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Gulf central bankers were huddled in separate meetings on Sunday to discuss the downgrade, sources said. (File Photo)The United Arab Emirates will keep its currency peg to the US dollar even after Standard & Poor’s downgraded the world’s biggest economy, and Oman sees no risk in investing in US treasuries, officials said on Sunday.

Gulf central bankers were huddled in separate meetings on Sunday to discuss the downgrade, sources said.

All Gulf Arab states, except for Kuwait, peg their currencies to the greenback and their fortunes are closely tied to US developments. Gulf states are also major investors in US treasuries.

“We are pegged to the dollar and will keep it. We don’t see the dollar collapse. Because the problem is not in the US only, but also in the European markets,” said Mohamed Al Tamimi, deputy executive director at the UAE central bank’s treasury department.

Read More: http://english.alarabiya.net/articles/2011/08/07/161213.html

The practice of using the U.S. dollar as the world’s reserve currency has become well entrenched in the minds of global investors. In fact, the system has become so habitual that many now believe there is no alternative to owning U.S. debt and dollars, simply because they are about as common as dirt.

The reasoning for this is since the market for Treasuries and greenbacks is so large; there is no other parking place for that money, which makes a mass exodus from U.S. debt holdings virtually impossible. Therefore, investors can’t sell and values can never go down in a significant manner. Such sophomoric reasoning is akin to saying IBM stock can never fall precipitously unless most owners decided to sell their shares.

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The Federal Reserve may keep interest rates at record lows for the longest period since World War II as the economic slowdown that sparked a four-month bond rally worsens, according to Treasury market signals.

The 3-percentage-point gap between yields for three-month and 10-year Treasuries indicates the economy may grow 1.1 percent in the 12 months ending June 2012, a study by the Fed Bank of Cleveland says. That’s less than half the central bank’s current forecast, and may delay any rate increase from the zero- to-25 basis point range held since December 2008.

Read More:  http://www.bloomberg.com/news/2011-07-11/fed-on-hold-longest-since-1940s.html

The currency market – and perhaps the financial market at large – is looking at the best opportunity to jump start a meaningful and enduring trend that we have seen in many months next week. The vast majority of the time, the markets are set within some form of trend.

This does not necessarily entail a bullish or bearish bias. Rather, the inclination resides in a sense of familiarity for the crowd. Whether the masses agree congestion on EURUSD, a persistent climb for the S&P 500 or tumble for the 10-year US Treasury note is the appropriate level of activity and direction; it is the consistency in performance that reinforces the trend and lulls market participants into a sense of comfort. Yet, it is inevitable that the speculative arena eventually changes gears.

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