09.02.26 - China urges banks

China has reportedly instructed domestic banks to reduce exposure to US Treasuries and limit new purchases, citing concerns over volatility and US debt risks.
After Japan (USD 1.2tn) and the UK (USD 888bn), China – with almost USD 700bn – remains the third-largest foreign holder of US government bonds. Even marginal shifts in China’s allocation policy therefore carry outsized signaling effects for global markets, both psychologically and structurally.

Markets:

• USD under pressure

• Bonds: US yields broadly ungchanged - US 10-year yield at ~4.20% - while Japanese yields moved higher again, close to 2.3%

• Commodities: strong safe-haven rally with gold +2% and silver +7%

My View: his should be seen as a strategic move within the broader trade-war and geopolitical framework. Tariff threats, technology restrictions, strategic resource dependencies, and geopolitical posturing continue to point toward a persistent risk of renewed trade conflict.

This is not an imminent collapse scenario, but another step highlighting that the de-dollarization trend still has room to run. A reduced structural demand for US assets implies a structurally weaker USD as a relevant medium-term theme.

At the same time, a weaker dollar raises import prices for the US, potentially adding to inflationary pressure.

In this environment, precious metals remain a strategic hedge against geopolitical risk, currency debasement, and rising systemic uncertainty. Demand for safe-haven assets such as gold, silver, and the Swiss franc is therefore likely to remain supported.

The ETFMandate is therefore fully hedged against the USD and has substantial exposure in gold and silver, even increased last week.

Become a member to access more valuable market updates like this