UPDATE: Jan Net Foreign Sales Of Long-Term US Secs $60.9 Billion
16 März 2009 - 4:20PM
Dow Jones News
Net foreign sales of long-maturity U.S. securities totaled $60.9
billion in January, following purchases of $24.3 billion the month
before, according to a U.S. Treasury Department report released
Monday.
The monthly Treasury report highlights cross-border acquisitions
of securities with maturities of more than one year including
non-market transactions such as stock swaps and principal repayment
on asset-backed securities.
The closely watched figure, excluding transactions that don't
occur on an open market, recorded net selling of $43.0 billion in
long-term U.S. securities, after purchases of $34.7 billion in
December, according to the monthly Treasury International Capital
report, known as TIC.
The report's most comprehensive category, "monthly net TIC
flows," includes non-market flows, short-term securities and
changes in banks' dollar holdings. This measure of net foreign
capital outflow was a record $148.9 billion in January, versus an
inflow of $86.2 billion the previous month.
Financial market analysts consider the monthly data from the
Treasury Department to be a significant but imprecise gauge of how
easily the U.S. can finance its trade deficit. The January TIC flow
compares with the $36.03 billion trade deficit during the month,
which was the smallest gap since 2002.
Michael Woolfolk, senior currency strategist at the Bank of New
York Mellon, said the big outflows are a concern and could
represent a trend away from the flight to quality that has boosted
purchases in U.S. assets in recent months.
"This was a truly awful report, throwing into question the
funding of the U.S. current account deficit," he said in a
statement. "The irony is that the deterioration in the TICS data
was largely due to an alleviation in risk averse, safe-haven
purchases of (dollar)-denominated deposits and the return of U.S.
investors to the foreign bond market."
Within the long-term securities category, foreign net purchases
of U.S. Treasury notes and bonds totaled $10.7 billion in January,
compared with net purchases of $15.0 billion the month before.
Private foreign investors bought a net $12.7 billion in Treasury
notes and bonds in January, after buying $11.8 billion in December.
Meanwhile, foreign official institutions such as central banks sold
a net $1.9 billion of these Treasurys, compared with net purchases
of $3.9 billion the month before.
Net foreign sales of debt issued by U.S. government-sponsored
agencies like Fannie Mae (FNM) and Freddie Mac (FRE) totaled $22.5
billion in January, compared with $37.4 billion in sales in
December.
For U.S. equities, net foreign purchases totaled $1.4 billion in
January, compared with purchases of $3.9 billion the previous
month.
For corporate bonds, net foreign sales were $8.4 billion, versus
purchases totaling $41.0 billion the previous month.
China, according to the December data, remained the largest
holder of U.S. Treasury securities, having surpassed Japan late
last year. China's holdings totaled $739.6 billion, followed by
Japan's $634.8 billion and $186.3 billion among oil exporters
Tony Crescenzi, chief bond-market strategist at Miller Tabak
& Co., said net selling by Caribbean banking centers and
Luxembourg could be related to the scandal involving financier
Bernard L. Madoff.
Sales in those two areas "reek of hedge-fund selling and quite
possibly from investors who were Madoff-ed," said Crescenzi.
The TICs data, typically released around the 11th business day
of the month, can be found on the Treasury's Web site at:
http://www.treas.gov/tic. With each monthly release, Treasury
revises the previous month's data as well.
The next report, covering February, is scheduled for release
April 15.
-By Tom Barkley, Dow Jones Newswires; 202-862-9275;
tom.barkley@dowjones.com
(Emily Barrett in New York contributed to this report)