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China is driving a jump in Belgian holdings of Treasuries and is a key reason for a plunge in yields even as the Federal Reserve trims its stimulus to support growth, according to Bank of America Merrill Lynch.

The CHART OF THE DAY tracks a 41 percent surge in Belgian ownership of U.S. bonds in the five months through May to $362.4 billion. This came at a time when China, the largest foreign holder of Treasuries, kept its official stockpile around $1.27 trillion. Belgium is home to Euroclear Bank SA, a provider of securities settlements for foreign lenders, which indicates the increase in holdings reflects global rather than local demand, said David Woo, BofA’s head of global rates and currencies.

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