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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Oblivious who wrote (81709)	10/19/2011 2:03:56 AM
From: elmatador	Read Replies (1) \| Respond to of 217656

China was a heavy seller of US Treasury debt in August, but foreign demand for US stocks, bonds and other financial assets surged in August as investors focused on buying Treasuries as a haven investment. China sells US Treasury debt amid strong haven demand By Michael Mackenzie in New York China was a heavy seller of US Treasury debt in August after Standard and Poor’s downgraded the US’s triple A credit rating, according to monthly data released on Tuesday by the Treasury. But foreign demand for US stocks, bonds and other financial assets surged in August as investors focused on buying Treasuries as a haven investment. The eurozone debt crisis and a sharp fall in global equities outweighed any impact on demand from S&P cutting the US credit rating one notch to double A+ in early August. Large purchases of US Treasury securities came from investors in the UK, Switzerland, Japan and Caribbean banking sectors, which are favoured by hedge funds. “The flows reinforce the safe-haven appeal that US Treasuries continue to enjoy, even if the turmoil was being driven in part by concerns about the quality of these assets,” said Millan Mulraine, analysts at TD Securities. The outlier was China, which sold $36.5bn in Treasuries, with sales of $40bn in longer-dated coupons taking the country’s holdings down to $1,137bn, the lowest in a year. That still left China as the largest foreign holder of Treasuries followed by Japan at $936.6bn, up from $914.8bn in July. UK Treasury holdings rose $42.5bn in August to $397.2bn, up from $181bn over the past year. But given London’s status as a financial centre, such flows may reflect purchases from other countries and in the past?UK holdings have dropped sharply in favour of China when the Treasury has annually revised Tic data. Swiss holdings jumped by $39.1bn to $147.5bn, but the move was seen as reflecting efforts by the central bank to weaken its currency. The August Tic data could well mark a high point for US Treasuries purchases. There has been significant selling by foreign official entities and private Japanese investors after the 10-year yield dropped to 1.72 per cent in September, its lowest level since 1945. The benchmark yield has risen back to 2.25 per cent in October and Federal Reserve data show Treasury sales of $73.5bn by foreign central banks since the start of September. Private Japanese investors sold a record $29bn of foreign bonds in the last week of September, and their holdings are largely Treasuries. The US Treasury International Capital, or Tic, data for August revealed net purchases?of?$57.9bn?in?long-term securities by foreign residents, up from $9.1bn in July and confounded expectations of a drop of $20bn. The net foreign acquisition of long-term securities including changes in foreign holdings of short-term US securities and banking flows was $89.6bn, versus net sales of $52.4bn in July. The August Tic data consisted of $58.8bn in net foreign private inflows and $30.8bn in net foreign official inflows.