Foreign accounts are net buyers of US longer-term securities in October, increasing their holdings by $38.9 billion.

Taking into account net sales of foreign long-term securities by US accounts at minus $21.4 billion, the net inflow for October came to $17.5 billion.

Net purchases by foreign accounts of Treasury bonds and notes are minus -$61.2 billion. Net purchases of US corporate bonds are $26.6 billion. Net purchases of government agency bonds are $26.0 billion. Net purchases of US equities are $47.4 billion.

The two of the largest holders of US treasuries (long- and short-term) are Japan and China. Japan's holdings are up $12.6 billion to $1.148 trillion in October. China's holdings are up $0.1 billion to $756.4 billion in October.

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.

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.