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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (25645)	3/15/2005 10:20:13 AM
From: CalculatedRisk	Respond to of 116555

Foreign Capital Into U.S. Surged in Jan. Business - Reuters news.yahoo.com WASHINGTON (Reuters) - Net inflows of capital into U.S. assets surged to a more-than-expected $91.5 billion in January, the second biggest inflow on record and more than enough to finance the nation's current account deficit that month, a Treasury Department (news - web sites) report showed on Tuesday. Net inflows of capital climbed from a revised $60.7 billion in December that was originally reported as $61.3 billion. January's capital inflows were the largest since $103.9 billion in May 2003, Treasury said. Currency analysts had forecast a net inflow into U.S. assets in a range between $55 billion and $75 billion for January. Financial market participants watch the report as a measure of foreigners' appetite for U.S. assets. The United States depends on foreign investors buying U.S. assets like Treasury bonds to finance its current account deficit. Net inflows short of the deficit could increase selling pressure on the dollar. January inflows handily offset the monthly U.S. trade deficit of $58.3 billion in the first month of 2005. Americans made net purchases of $6.6 billion in foreign stocks and sold a net $5.5 billion in foreign bonds in January, the Treasury said. U.S. residents' $1.1 billion net purchases of foreign securities in January dropped sharply from a revised $22.4 billion in December. Net purchases of U.S. securities by foreigners rose to $92.5 billion in January from $83.2 billion the previous month, the data showed. Foreigners bought a net $16.49 billion in equities in January and a net $30.75 billion in U.S. government bonds and notes. Foreigners' net purchases of U.S. corporate bonds fell to $19.29 billion in the first month of 2005 from $40.86 billion in December. Foreign accounts made net purchases in January of long-term U.S. agency bonds of $26.02 billion, down from $26.60 billion in December.