Highlights
Foreign accounts were net buyers of US long-term securities in September, increasing their holdings by $208.5 billion. Taking into account net purchases of foreign long-term securities by U.S. accounts, at $28.7 billion, the net US inflow for September came to $179.8 billion, compared with a net inflow of $134.2 billion in August.
Net buys of Treasury bonds and notes at $25.6 billion were positive for U.S. long-term holdings by foreign accounts as were net purchases of government agencies at $9.6 billion and corporate bonds at $40.5 billion. The big plus was net purchases of U.S. equities of $132.9 billion.
Among top foreign holders of U.S. Treasuries (long and short-term), Japanese accounts increased their holdings by $8.9 billion to $1,189.3 billion in September from $1,180.4 billion in August. UK holdings fell by $39.3 billion to $865.0 billion versus $904.3 billion in August. Chinese accounts decreased their holdings by $0.5 billion to $700.5 billion in September from $701.0 billion in June.
Net buys of Treasury bonds and notes at $25.6 billion were positive for U.S. long-term holdings by foreign accounts as were net purchases of government agencies at $9.6 billion and corporate bonds at $40.5 billion. The big plus was net purchases of U.S. equities of $132.9 billion.
Among top foreign holders of U.S. Treasuries (long and short-term), Japanese accounts increased their holdings by $8.9 billion to $1,189.3 billion in September from $1,180.4 billion in August. UK holdings fell by $39.3 billion to $865.0 billion versus $904.3 billion in August. Chinese accounts decreased their holdings by $0.5 billion to $700.5 billion in September from $701.0 billion in June.
Definition
These Treasury data track the flows of financial instruments into and out of the United States. Instruments tracked include Treasury securities, agency securities, corporate bonds, and corporate equities.
Description
TIC data have been issued since the 1970s, but only recently, due to an enormous rise in foreign participation in our markets, have they grabbed the attention of the international financial markets. Although methodologically limited, TIC offers a measure of foreign demand for our debt and assets. Bonds and the dollar are most sensitive to the data, therefore bond and foreign exchange markets are more likely to react to this report than the equity market. Strong inflows (demand for U.S. securities) are needed to keep downward pressure on interest rates. Strong inflows also underpin the value of the dollar since foreigners must purchase dollars in order to buy our securities. A strong dollar helps to maintain stability in all U.S. financial markets. Since foreign ownership of U.S. equities is comparatively small, the equity market is less concerned about this report.
