While the riots in Los Angeles could continue to dominate the news this week, traders should be keeping tabs on two markets heading in very different directions. Silver in particular is showing signs of life and is turning into an interesting trade.
The US Treasuries market and the overall size and state of US national debt seems to be heading in the other direction. This coming Thursday the US Treasury is scheduled to go to the market with an auction of $22bn in 30-year government debt. Although this is a scheduled auction, it will be watched closely as an indicator of sentiment on US debt.
Treasuries are a widely held investment by investors around the world, including governments and sovereign wealth funds. But worries about the state of the US economy and the level of US national debt are creeping up. The long maturity dates of these bonds - 30 years - mean they will be a better indicator than most of how big international investors feel about the US economy.
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