Today’s Treasury International Capital (TIC) data report had the largest one month decline in net long-term securities transactions; from 97.3b to 19.2b. The -9.3b net foreign sales of long-term Treasuries is the largest liquidation in five and a half years.
There was an apparent flight to quality as holdings of short-term dollar securities raised 66.6b from a net loss of 27.6 in June. Net Treasury bill buying was 18.7b compared with net sales of 17.9b in June.
Have foreign investors finally decided to bail on US long-term Treasuries as has long been feared? I know one report does not a trend make but now that the Fed has started a new round of rate cuts and clearly signaled it’s willingness to let the dollar go, why would foreign investors want to buy long-term Treasuries?
http://www.treas.gov/press/releases/...60_ticdata.pdf