China - US Relations: Treasurys: Bond markets move because US depends on China as buyer - by Huileng Tan

Markets took a hit following a Bloomberg News report that cited unnamed sources as saying that officials in Beijing have recommended China, the largest holder of U.S. Treasurys, to slow or even halt its purchases of that debt.

U.S. stocks on Wednesday snapped a six-day winning streak, and Treasury yields, already in an upswing, moved higher with the 10-year reaching 2.597 percent, their highest level since March 15. Bond yields rise when bond prices fall.

China's foreign exchange regulator publicly refuted the Bloomberg report on Thursday, saying it cited "false information." But the jolt to markets may have been designed as a warning to Washington, which is clashing with China over trade and other issues.

China holds $1.2 trillion of U.S. debt — more than any country. When it buys U.S. bonds, it is effectively lending money to the United States. Washington uses bond sales to China and others to help finance itself.

Read more: Treasurys: Bond markets move because US depends on China as buyer

EU Stock Market Merger On Ice: EU set to block stock market mega merger

 London Stock Exchange (LSE) said its proposed merger with Deutsche Börse AG was unlikely to be approved by the European Commission, leaving the stock market operators’ third attempt at combining on the brink of failure.

The LSE said in a statement late on Sunday (26 February) that the Commission had asked it to sell its 60% stake in fixed-income trading platform MTS to satisfy antitrust concerns over the merger of Europe’s two largest market operators.

Calling the request “disproportionate”, the British exchange said it believed that it would struggle to sell MTS and that such a sale would be detrimental to its ongoing business.

“Based on the Commission’s current position, LSE believes that the Commission is unlikely to provide clearance for the merger,” it said.

The exchange added that it would still work to make the merger with Deutsche Börse succeed, but that would be impossible unless the executive changed its position.

Read more: EU set to block stock market mega merger – EurActiv.com