Tags: capital | inflows | China | Japan

US October Capital Inflows Biggest in 5 Years

Monday, 16 December 2013 11:03 AM EST

Foreigners poured money back in the United States in October at the biggest monthly clip in five years after they fled in September on fears that the government could default on some of its debt obligations, U.S. Treasury data showed.

Foreigners bought $194.9 billion more in U.S. stocks and bonds than what they sold in October, compared with a net sale of $97.6 billion in September. The September net sale was originally reported at $106.8 billion.

October's capital inflows into the United States were the largest monthly increase since a $272.9 billion surge in October 2008 as foreigners went on a safe haven stampede into U.S. assets in the aftermath of the collapse of Lehman Brothers during the global credit crisis.

"Overall, this report showed continued healthy demand for U.S. securities, and even at the time when their were concerns about the prospect of a U.S. debt default global appetite for Treasurys remained healthy, reinforcing the unrivaled appeal of U.S. government securities globally," Mullan Mulraine, TD Securities' director of U.S. research & strategy wrote in a research note.

Mulraine said the Federal Reserve's surprise decision in September to not shrink its $85 billion monthly purchases of Treasurys and mortgage-backed securities also likely revived overseas appetite for U.S. investments.

Investors raised their holdings of long-term U.S. securities in October for a second straight month by $35.4 billion. This followed a $31.3 billion increase in September, which was adjusted from an originally reported $25.5 billion.

Their holdings of short-term securities rose by $11.6 billion following a revised $24.8 billion decline in September. Net private ownership of Treasury bills, however, fell for a second month by $15.3 billion.

Foreigners' overall Treasury holdings rose by $39.71 billion in October, following an upwardly revised $28.5 billion in September.

China, the largest U.S. creditor, raised its holdings of U.S. government debt to $1.305 trillion in October, up $11 billion from September.

Japan, the No. 2 U.S. creditor, trimmed its Treasurys ownership by $4 billion to $1.174 trillion.

© 2024 Thomson/Reuters. All rights reserved.


Economy
Foreigners poured money back in the United States in October at the biggest monthly clip in five years after they fled in September on fears that the government could default on some of its debt obligations, U.S. Treasury data showed.
capital,inflows,China,Japan
331
2013-03-16
Monday, 16 December 2013 11:03 AM
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