Chinese Treasury Holdings Slide To Lowest Since July

In the aftermath of Bloomberg's report from last week that China may slow down or reverse its Treasury purchases should the US trigger trade war with Beijing, pundits were closely watching today's TIC report from the Treasury to see what China did November. And according to the just released Treasury International Capital data data for the month of November, Chinese Treasury holdings dropped from $1,189.2BN in October to $1,176.6BN in December, the lowest since July's $1,166BN.

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China wasn't the only seller in November: the total value of foreign investors Treasury coupon holdings fell $18.825 billion in November on top of a $22.264 billion decline in October, but foreign holdings of corporate debt surged $28.699 billion in November, following a $10.447 increase in October. There was also a net increase in the value of GSE/MBS holdings of $12.267 billion in November after the $9.971 billion increase in October. These totals do not include adjustments for non-marketable Treasuries, ABS repayments and stock swaps.

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On an LTM basis, foreign central banks sold $127.3 billion in TSY, a liquidation which peaked in November 2016 and was driven by China. This was modestly below the $121.5 billion in October.

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Some other notable foreign holders of US paper:

  • Japan holds $1.08t, a decrease of $9.9b from last month
  • Belgium holds $115.3b of U.S. Treasuries, a decrease of $0.7b from prior month
  • Russia holds $105.7b of U.S. Treasuries, an increase of $0.7b from prior month
  • Cayman Islands hold $269.4b, a decrease of $0.5b from last month
  • Saudi Arabia holds $149.0b, an increase of $3.8b from last month