Foreign holdings of Treasuries hit record high in October -data

  • 12/16/2021
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Foreign holdings of U.S. Treasuries, led by Japan and China, rose to a record high for the month of October, data from the Treasury department showed on Wednesday. Major foreign owners of Treasuries showed holdings of $7.648 trillion in October, an all-time peak, compared with $7.549 trillion the previous month. The record number suggested continued appetite for U.S. government debt given uncertainty about global growth and inflation and amid low bond yields around the world, analysts said. "U.S. yields were a little higher during the month and that may have attracted some of the buyers and made Treasuries look like a better investment," said Gennadiy Goldberg, senior rates strategist, at TD Securities in New York. U.S. benchmark 10-year Treasury yields started October with a yield of 1.4650% , rising nearly 10 basis points to 1.5609% by the end of that month. Japan remained the largest non-U.S. holder of Treasuries with holdings in October of $1.320 trillion, a record peak, from $1.299 trillion the previous month. China"s holdings also increased to $1.065 trillion, from $1.047 trillion in September. On a transaction basis, foreigners sold Treasuries in the month of October to the tune of $43.5 billion, the largest outflow since May. But TD"s Goldberg said this does not reflect the true picture in terms of foreign holdings of Treasuries because there is a bias toward transactions that does not account for steady holdings. Data also showed U.S. corporate bonds had inflows for a third straight month with $11.995 billion in October, from $1.09 billion in September. Foreign investors, meanwhile, sold $21.827 billion in U.S. equities in October, after also selling $10.951 billion the previous month. Data also showed that U.S. residents reduced their holdings of long-term foreign securities, with net sales of $29.2 billion. Overall, net foreign acquisitions of U.S. long-term and short-term securities, including banking flows, showed a net inflow of $143 billion in October, from an outflow of $27.3 billion in September. Reporting by Gertrude Chavez-Dreyfuss, Editing by Rosalba O"Brien and David Gregorio Our Standards: The Thomson Reuters Trust Principles.

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