Explore our analysis on 5 key areas that are shaping global businesses.
12 Feb 2026
The participation of foreign buyers (mainly Europe and Japan, China has sold nearly all of its Treasury holdings) in yesterday’s 10Y Treasury auction was 70%, up from 65% in Dec, and far above the 60% dreaded by markets. This is a resounding yes in a US dollar confidence referendum. It shows allies remain loyal to the US, resisting the rise of the yuan to a reserve status, despite Trump’s foreign policies that mark a significant deviation from a rules-based world order, which has alienated allies and sharpened the foes’ resolve to fight back. The pragmatism of central banks (ECB & BoJ) prevailed over a general feeling of resentment at least in Europe.
This Letter highlights the importance of the Treasury auction. The US fiscal-monetary wedge (easy fiscal policy-tight monetary policy) is identified as a potential catalyst for asset implosion & dollar plunge.