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Comments on US Treasury data – Flows into and out of Treasuries

Cory
January 19, 2017

Yesterday the US Department of Treasuries released its Treasury International Capital (TIC) data for the month of November. This data outlines the flows into and out of US Treasuries. There is a lot of data to go through so I will highlight some of what I am look at with the help of our friend Peter Boockvar. I will also include links to some of the country specific charts below.

Remember all this data is for November 2016.

  • Foreign countries were net sellers of T-Bonds to the tune of $200 million. This is tiny when compared to being net-sellers of $63.5 billion in October and $76.6 billion in September.
  • Year to date selling (as of November) of T-Bonds around the world stands at $321 billion!
  • Europe and Latin America were the largest net buyers of T-Bonds totaling $5.8 billion and $9.6 billion respectively.
  • The rest of the world was selling T-Bonds.
  • The Caribbean had the largest net outflows totaling $9.2 billion of which the Cayman Islands offloaded $10.8 billion.
  • China and Japan were net sellers, $2.9 billion and $6.6 billion respectively.
  • On top of that China and Japan’s holdings of T-bills fell by $63 billion and $23.3 billion!

Here are some links if you want to dive into the data.

The Treasury department’s press release on Capital Data.

Link to Foreign Net Purchases of US Long-Term Securities.

U.S. Financial Firms’ Liabilities to Foreign Residents.

Overall when we see global money flow change this drastically out of a certain market we need to assess what kind of impact it will have. Without another few major buyers willing and able (able is the most important aspect here) then the argument for a bull market in US Treasuries is a tough one to make. Now this all might change but as Chris said in our editorial earlier today, the big players like China are selling because they are in trouble. I don’t see China’s slowdown reversing… Do you?