Tags: Treasury Global Demand for US Assets Weakened in March

Treasury: Global Demand for US Assets Weakened in March

Monday, 16 May 2011 09:36 AM

Global demand for U.S. stocks, bonds and other financial assets weakened in March from a month earlier as China trimmed its holdings of government securities, the Treasury Department reported.

Net buying of long-term equities, notes and bonds totaled $24 billion during the month compared with net buying of $27.2 billion in February, according to statistics issued today in Washington. Including short-term securities such as stock swaps, foreigners purchased a net $116 billion compared with net buying of $95.6 billion the previous month.

The Treasury’s reporting on long-term securities helps gauge confidence in the U.S. economy as well as fiscal and monetary policy. The data capture international purchases of government notes and bonds, stocks, corporate debt and securities issued by U.S. agencies such as Fannie Mae and Freddie Mac, which buy home mortgages.

“Inflows continue into the U.S. Treasury market but one might ask for how long?” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, before today’s report. “At some point foreigners will fail to advance America any additional credit and that could lead to soaring yields here. Greece, Ireland, Portugal -- someday the buck may stop here.”

China remained the biggest foreign holder of U.S. Treasuries, after its holdings fell by $9.2 billion to $1.145 trillion in March from $1.154 trillion in February, according to the Treasury’s statistics.

Japan, the second-largest holder, increased its holdings by $17.6 billion to $907.9 billion in March from $890.3 billion in February. Hong Kong, counted separately from China, reduced its holdings by $2.5 billion to $122.1 billion in March from $124.6 billion in February.

Before today’s report was issued by the Treasury, economists in a Bloomberg News survey projected long-term U.S. financial assets would show net buying of $33 billion in March. Seven economists participated in the survey and their estimates ranged from $10 billion to $45 billion.

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Global demand for U.S. stocks, bonds and other financial assets weakened in March from a month earlier as China trimmed its holdings of government securities, the Treasury Department reported. Net buying of long-term equities, notes and bonds totaled $24 billion during the...
Treasury Global Demand for US Assets Weakened in March
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2011-36-16
Monday, 16 May 2011 09:36 AM
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