Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: foreign | holdings | treasury | bonds

Foreigners Flee From US Government Bonds in April, Treasury Says

Friday, 14 June 2013 10:16 AM EDT

Foreign investors dumped U.S. government debt in April and were net sellers of all long-dated U.S. securities for the third consecutive month, the U.S. Treasury said on Friday.

Selling was heavily concentrated in Treasury bonds and notes, with overseas investors unloading $54.5 billion, the first net outflow in seven months. Private investors alone sold $30.8 billion - the largest one-month outflow on record.

Overall, foreigners sold $37.3 billion in long-term U.S. securities, the largest outflow in at least three years. March's outflow was revised slightly to $13.4 billion.

"Demand for U.S. securities was much weaker in April," said Gennadiy Goldberg, U.S. strategist at TD Securities. He said the scope of Treasury sales was "somewhat surprising given the fresh bout of European uncertainty observed in the month," referring to a European Union rescue of Cypriot banks.

Official investors, including central banks, were also net Treasury sellers in April. China, the largest foreign U.S. creditor, slashed its holdings by $5.4 billion to $1.265 trillion. Japan sold $14 billion, leaving its total holdings at $1.114 trillion.

However, foreigners bought $23 billion of debt issued or guaranteed by the biggest U.S. mortgage financing agencies, including Fannie Mae and Freddie Mac.

Goldberg said that suggests "some foreign accounts may have been repositioning into agency securities in a reach for yield."

Indeed, the yield on 10-year benchmark Treasury notes fell as low as 1.67 percent in April as markets worried about the strengths of the U.S. recovery and fears that Cyprus' problems could worsen the euro zone's debt crisis.

"Somebody was buying (Treasurys) and I don't think it was the Fed alone," Goldberg said. "Some of it was a domestic flight to safety."

U.S. equities remained in demand in April, with foreigners snapping up $11.2 billion after buying $6.8 billion in March.

Including short-dated assets such as bills, overseas investors bought $12.7 billion in April compared with $2.1 billion in March.

© 2024 Thomson/Reuters. All rights reserved.

Foreign demand for U.S. Treasury securities fell in April for the first time in more than a year, as China and Japan both trimmed their holdings.
Friday, 14 June 2013 10:16 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved