Weekly Flow Of Funds Summary
An overview of where money is moving most recently, from Morgan Stanley. Overall a mixed picture, with anyone who has half a brain dumping as many MBS as the Fed will buy (i.e., all of it), coupled with a mildly declining interest in Treasurys.
Futures Spec Positions: Unwinding Front Longs + Back Shorts. For the week ending December 1, specs took off $2B of 10y equivalents in front-end longs and $10B equiv. in back-end shorts
Primary Dealer Positions: Buying USTs / Mixed Spread Product. For the week ending November 25, dealers bought $16B Treasuries (mostly in the front end) while selling $2B of MBS
Foreign Central Bank Flows: UST +$5B / Agency-MBS +$1B. For the week ending December 2, FCB weekly average holdings of Treasuries rose $5B; Agency/MBS increased $1B
Fed Balance Sheet: Flat at $2.25T - For the week ending December 2, the Fed’s balance sheet contracted by $3B –with only FX Swap Lines down $3B to $23B
Sep TIC Data: Foreigners Continue to Overweight Treasuries. Private accounts and FCBs purchased a total of $45B Treasuries in September (50% higher than the 12-month pace), led by JP + China
Oct Mutual Funds: MM Outflows / Bond Fund Inflows Continue$64B MM fund outflow / $43B fixed income inflow / $5B equity
And this is how Morgan Stanley is announcing it is axed to sell Treasuries, courtesy of several easy on the eye charts.