How big of a deal was today’s “big” news out of China regarding the future of U.S. Treasury purchases? Well, that depends on who you ask and, to a certain extent, when you ask them.

There’s something invigorating about a notable story crossing the wires first thing in the morning, so the tone of the early chatter out of U.S.-based commentators might well have reflected that glorious moment when the day’s first line of blow, shot of vodka, dose of caffeine starts to work its magic by jogging the old muse.

Upon more sober reflection (and “sober” there depends on how you choose to go about finding your muse in the morning), this might not be as earth-shattering as it seemed at 5 a.m.

Obviously, China will Plaxico themselves if they do anything too rash given the size of their holdings ($1.2 trillion) and as our buddy Kevin Muir wrote in his Wednesday note, “if China had selling to do, [they probably wouldn’t] jawbone down the price of US treasuries ahead of their sales.”

“Do you think they are that naive?,” he went on to ask, before suggesting he would “take the other side of that trade.”

Deutsche Bank agrees. “Because China holds so much in Treasuries, any small action it takes is apt to damage the existing stock of assets and its overall portfolio by more than any flow adjustment is apt to help the country in terms of return or geopolitical gains from some minor diversification,” the bank’s Alan Ruskin writes, in a note out this morning. “In this regard, it would also make sense for China to sell USD assets before talking about selling them.”

Indeed it appears Kevin isn’t the only one willing to “take the other side of the trade”, because the bond sell-off mitigated as the day wore on, with yields falling from their morning highs and Treasurys trimming losses some more after a solid 10Y auction.