Tags: Treasury | Global | Investors | US

Treasury: Global Investors Pour Record Amount Into US

Tuesday, 18 November 2014 05:57 PM EST

The U.S. posted a record inflow of long-term portfolio investments in September as the dollar strengthened and foreign buyers accumulated corporate debt, Treasurys and agency securities.

Foreigners bought a net $164.3 billion in long-term financial assets after $52.1 billion in purchases in August, the Treasury Department said in a statement Tuesday in Washington. The previous record was an inflow of $139.7 billion in March 2010.

The figures suggest the U.S. is luring investors with economic growth that’s outpacing other developed nations, as the euro area faces low inflation and slack demand and Japan copes with a recession. The data also showed Americans are selling foreign securities at a record pace.

“The U.S. is looking like the cleanest dirty shirt from a global perspective,” said Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York. “You had the U.S. actually lead the way in global growth, and a lot of people were attracted by that — they’re trying to keep their holdings more domestic.”

Foreign net buying of agency debt was $21 billion, the most since July 2013, while $20.7 billion in net purchases of corporate bonds was the highest in at least three years, the data showed. Buying of Treasury bonds and notes in September totaled a net $48.1 billion, the most since February, the department said.

Dollar Surge

The Bloomberg U.S. Dollar Index, a gauge of the greenback’s value against 10 major currencies weighted by liquidity and trade flows, jumped 4 percent in September. Investors in Treasurys lost 0.6 percent that month, according to Bloomberg World Bond Indexes.

Almost half of the inflows came from private foreign investors, who were net purchasers of $80.5 billion in Treasuries, agencies, corporate debt and stocks during the month, the biggest gain since August 2010. Government investors were net purchasers of $13.7 billion in U.S. securities, a three-month high.

The inflows figure of $164.3 billion was also boosted by U.S. residents’ selling a record net $70.1 billion in foreign bonds and stocks in September, up from $25.5 billion in August.

That increase may also be attributed to “the stronger U.S. growth story,” Goldberg said. “You actually did have the U.S. continue to outperform global growth, and I think there was a lot of repositioning.”

China, Japan

The figures released Tuesday also showed China and Japan, the two largest foreign holders of Treasurys, reduced their stockpiles in September. China’s holdings dropped $3.4 billion to $1.27 trillion, while Japan’s fell $9 billion to $1.22 trillion, the data showed.

The U.S. economy expanded more than forecast in the third quarter, growing at a 3.5 percent annualized pace, while unemployment fell in October to a six-year low. Gross domestic product in the euro area rose 0.2 percent last quarter from the prior period.

Japan’s GDP shrank an annualized 1.6 percent in the three months through September as the world’s third-largest economy struggled to shake off the impact of an April sales-tax boost.

© Copyright 2024 Bloomberg News. All rights reserved.


Finance
The U.S. posted a record inflow of long-term portfolio investments in September as the dollar strengthened and foreign buyers accumulated corporate debt, Treasurys and agency securities.
Treasury, Global, Investors, US
486
2014-57-18
Tuesday, 18 November 2014 05:57 PM
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