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Preliminary Look At TIC Data

Tyler Durden's picture




 

A much more in depth TIC analysis will follow later in the day, but here is the preliminary data summary. First, the official press release:

Net foreign purchases of long-term securities were $15.3 billion.

  • Net foreign purchases of long-term U.S. securities were $44.0
    billion. Of this, net purchases by private foreign investors were $32.1
    billion, and net purchases by foreign official institutions were $12.0
    billion.
  • U.S. residents purchased a net $28.8 billion of long-term foreign securities.

Net foreign acquisition of long-term securities, taking into account
adjustments, is estimated to have been negative $7.4 billion.

Foreign holdings of dollar-denominated short-term U.S. securities,
including Treasury bills, and other custody liabilities decreased $4.5
billion. Foreign holdings of Treasury bills increased $14.4 billion.

Banks' own net dollar-denominated liabilities to foreign residents decreased $85.7 billion.

Monthly net TIC flows were negative $97.5 billion. Of this, net
foreign private flows were negative $131.3 billion, and net foreign
official flows were $33.8 billion.

The primary concern is mainland China, where there was a marked slowdown in Long-Term Treasury (Bond) purchases: $26.6 billion were purchased in June, with $15.3 billion in July. China's exodus in all other LT securities continues: ($2.1) billion, ($0.3) billion and ($0.1) billion sold in Agencies, Corporates and Stocks, respectively. In the short-term category, China flipped its aggressive selling which is June was ($52) billion, and purchased $8.8 billion in total Short-Term Treasury securities.

Also notable was the UK, which after being the primary purchaser of LT Treasuries in June at $45 billion (and a total of $49 billion across all LT classes), saw a dramatic drop in appetite for US securities:  with just a $6.6 billion increase in Treasuries, however with a $11.6 billion outflow in Corporate Bonds. Japan behaved similarly, with its total LT UST purchases of $32.8 billion in June dropping dramatically to just $3.7 billion in the current month.

It appears domestic sources of capital (US Investors and, of course, the Fed) are becoming the prevalent source of funding when it comes to US Treasury purchases.

As a frame of reference the Fed, via various POMOs, purchased $41.5 billion in USTs. Also, in July, the US Treasury issued $174 billion in various maturities.

A much more detailed report will be presented tonight.

 

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Wed, 09/16/2009 - 10:21 | 70992 Mos
Mos's picture

Fed fell $3B short of purchasing more USTs than foreigners. Scary stuff.

If I remember correctly, doesn't China purchase USTs through some UK broker so that it looks like the UK was the purchaser when in fact it was China?

Wed, 09/16/2009 - 11:45 | 71121 Printfaster
Printfaster's picture

Even so, can anyone be sure of the actual numbers?  Any of the foreign purchasers in the Caymans?

 

Wed, 09/16/2009 - 10:25 | 70999 Stuart
Stuart's picture

Good luck with the QE cutbacks Ben.   

Wed, 09/16/2009 - 10:49 | 71030 crzyhun
crzyhun's picture

Stay tuned, indeed. When this train stops, it will take a long time to get a rollin'. Wasn't $/Y to go to 105 according to the GS folks??

Wed, 09/16/2009 - 11:44 | 71118 Printfaster
Printfaster's picture

If the Fed doesn't up rates, they will need to use a lot of NYC commercial real estate to store all the bonds that they will be buying.  The fed building will be bursting at the seams.

 

Wed, 09/16/2009 - 13:00 | 71233 Jack Sparrow
Jack Sparrow's picture

this game of musical chairs has a loong loong way to run...

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