HACKER ATTACK ON CHINA’S LARGEST BANK MAY HAVE IMPACTED US TREASURY – Banks – 23 November 2023

The cyber attack disrupted some Chinese bank systems, reportedly hitting the liquidity of US Treasury bonds, which may have contributed to a brief market sell-off on Thursday (9).

New York-based ICBC Financial Services said in a statement that the attack, which occurred on Wednesday (8), had been reported to authorities. The company was investigating the incident and trying to recover from the cyberattack.

“ We were able to successfully clear US Treasury trades executed on Wednesday, and [agreed to repurchase] trades funded on Thursday ,” the statement said.

It’s unclear whether the incident contributed to the weak 30-year bond auction conducted by the U.S. Treasury on Thursday.

There was a “sharp selloff” in Treasury bonds after the auction, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note to investors on Friday, saying yields rose for a number of different bonds.

“It is clear that the sudden jump in US yields hit the appetite for US stocks yesterday,” Ozkardeskaya said.   “The US bond auction brought a lot of volatility, doubt and uncertainty.”

The S&P 500, Dow Jones and Nasdaq indexes closed lower on Thursday.

China is a   important player in the Treasury bond market.

According to the most recent data from the US Treasury Department, China held US$805.4 billion (R$3.982 trillion) in Treasury bonds in August. The country is the second-largest foreign holder of US Treasury bonds in the world, after Japan.

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