Europe's $8 trillion stake in US assets draws scrutiny after Greenland move

Businessinsider reports President Donald Trump's push to acquire Greenland is rattling markets and testing confidence in US assets, drawing attention to Europe's leverage in US capital markets. On Tuesday, Treasurys sold off and yields climbed to their highest level in more than four months, while the US Dollar Index moved lower.

Deutsche Bank research noted European countries own around $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined, and George Saravelos wrote that this exposure highlights a key vulnerability: the US depends heavily on foreign investors to finance its debt.

Saravelos said Danish pension funds repatriated capital and cut dollar exposure last year, warned that dollar exposure across Europe remains elevated, and wrote that "it is a weaponization of capital rather than trade flows that would by far be the most disruptive to markets." Chris Weston of Pepperstone wrote that US assets now carry a much higher political risk premium, a shift that could push foreign investors to reduce US exposure and boost haven assets like gold.

Key Topics

Business, Greenland, Donald Trump, Us Treasuries, Us Dollar, Deutsche Bank