US Economy: US agrees to give China direct access to its auctions

In an unprecedented agreement, the U.S. Treasury has agreed to give China direct access to its auctions. Per the deal, China is allowed to bypass Wall Street, and purchase Treasury Bills without placing any bids through primary dealers.

The deal wasn't announced publicly or in any message to primary dealers.

Not in the entire 237-year history of the US has any foreign government been granted such intimate access to Capitol Hill.

Although there were no laws being broken this certainly is quite dangerous.

China already holds more than $1.2 trillion in U.S. Treasuries. Before long, China will own 50 cents on every dollar of U.S. debt.

EU-Digest

Italian yields fall sharply in €5 billion auction; Monti govt survives confidence vote

Italy easily raised €5 billion ($6.47 billion) in a pair of bond auctions on Thursday that saw a sharp drop in borrowing rates, a sign that investor confidence in the country is improving.The sale was the first test of market sentiment in the country’s handling of its debt since ratings agency Standard & Poor’s cut Italy’s credit rating by two notches on Jan. 13.

Italy paid an interest rate of 3.763 percent on €4.5 billion in two-year bonds, compared with 4.85 percent in a comparable auction in December. The borrowing cost for a new bond expiring in September 2014 was 3.2 percent.

UniCredit analysts said the sale was “positive” and an encouraging sign for upcoming auctions.

For more: Italian yields fall sharply in €5 billion auction; Monti govt survives confidence vote - The Washington Post