Foreigners Bought A Record Amount Of US Stocks In May, Sold Treasuries

The US Treasury’s report on International capital flows shows that, May saw record buying in US Stocks by foreigners…

And sold Treasuries…

• Foreign net selling of Treasuries at $27.7b

• Foreign net buying of equities at $79.7b

• Foreign net buying of corporate debt at $13.6b

• Foreign net buying of agency debt at $2.4b

As an aside, it was central banks that were buying US Treasuries (+10) as private foreigners sold (-$37bn) as The Fed’s foreign-exchange swap lines were still in place during May, offering foreign central banks an alternative to selling Treasury holdings to meet dollar-funding needs and support their currencies.

Ireland (+$23.2bn), UK (+19.7bn), India (+12.5bn), and Hong Kong (+$11.4bn) led the official Treasury buying and China increased its US Treasury holdings in May by $10.9bn (the latest data for which TIC is reported)…

Source: Bloomberg

As Japan reduced its holdings, down $5.8bn (but remains America’s largest foreign debt holder)…

Source: Bloomberg

France (-$7bn) was the biggest official net seller of US Treasuries in May.

And finally, we note the overall trend towards de-dollarization continues…

Source: Bloomberg