Foreign holdings of US Treasuries declining

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According to the Treasury Dept. (link in last post), as of Dec. 2014, Belgium owned the 3rd largest position with $335.4B. That's ~$46B down from what they had in March 2014.
 

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Just a day after President Donald Trump’s much-maligned meeting in Helsinki with Russian President Vladimir Putin, a monthly report from the Treasury Department showed that Russia is no longer considered a “major foreign holder” of U.S. government securities. That’s because in the two months through May 31, the nation’s Treasuries hoard plummeted to just $14.9 billion from $96.1 billion. The threshold to be considered a major holder is $30 billion. There are 33 of them.

Such an aggressive reduction is not normal. To put the $81.2 billion decline into context, the most Japan has ever cut back in a two-month stretch is $47.8 billion. China, the largest foreign owner of Treasuries, has scaled back to a similar extent on occasion, but it was a mere fraction of its total. For Russia, once a top-10 holder, this looks like a full-scale liquidation. Since the start of 2017, no country’s holdings have fallen more, either on an absolute or percentage basis.
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https://www.bloomberg.com/view/articles/2018-07-19/russia-s-mysterious-exodus-from-treasury-market
 

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A worrying sign of inversion in the U.S. Treasury bond curve is dulling the appeal of the developed world’s highest-yielding bond market for foreign investors.

Overseas investors are reviewing their investments or shunning Treasuries as rates at the short end rise above those at the longer end and make it unprofitable for holders of these bonds to hedge their currency risks.
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More: https://www.reuters.com/article/us-...es-as-curve-threatens-to-invert-idUSKBN1OA0J6

That article is mainly talking about non-government actors, but it still could be significant.
 

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The two biggest foreign holders of America’s sovereign debt pared their holdings in October, according to the latest data released by the US Treasury Department. Foreign holdings of US Treasuries have fallen to a one year low.

China’s holdings of notes, bills and bonds fell to $1.14 trillion in October compared to $1.15 trillion in the previous month, marking the lowest level since May 2017. The world’s second-largest economy had been slashing its holdings for a fifth consecutive month.
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Japan seems to have followed the lead. The second biggest holder of the US state-issued bonds cut its share to $1.018 trillion against $1.028 trillion in September, marking the third consecutive month of reduction.
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All in all, foreign holdings of Treasury securities fell by more than $60 billion, marking the largest monthly decline since November 2016. An extensive decline in foreign demand for US government securities has recently become a hot issue as Washington is increasing issuance of debt. It has caused concerns that the declining number of overseas investors might put upward pressure on US interest rates.
https://www.rt.com/business/446761-us-treasury-china-cut-lowest/
 

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The U.S. Treasury on Wednesday saw the weakest demand for its benchmark 10-year note in a decade, illustrating the diminishing appetite among some investors to accept current yields.
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Foreign investors, led by China and Japan, have accounted for a smaller and smaller share of American government debt outstanding. And the Federal Reserve, for now, continues to trim its holdings. That’s put the onus on domestic U.S. investors, at a time when 10-year yields are little more than three-month ones.
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While there was some speculation that rising U.S.-China trade tensions could see Chinese buyers holding off at the auction, there was no obvious sign of that. Indirect bidders, the category that includes foreign and international monetary authorities placing bids through the New York Fed, took 53.3% of the sale, the least since April 2018. But direct bidders, “widely understood to be mostly driven by China,” according to Thomas Simons, an economist at Jefferies, took a near-average share.

Even so, the broader share of foreign ownership of Treasuries has steadily dropped over time, to little more than one-third as of the end of 2018, according to data compiled by Bloomberg. A decade before, it was more than 44 percent. As a result, last year saw U.S. funds “absorbing the largest amount of domestic securities on record,” Guillermo Tolosa, an economic adviser to Oxford Economics Ltd. who analyzes global capital flows, wrote in a May 2 note.
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More: https://www.bloomberg.com/news/arti...asonals-and-trade-trip-up-u-s-10-year-auction
 

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Belgium takes a deep breath .............. and 'buys' whatever no one else will

A massive reason for England to leave the E.U. I reckon
 

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China’s holdings of U.S. Treasuries dipped in May to the lowest in two years amid an escalation of the trade war between the world’s two largest economies.

The Asian nation’s pile of notes, bills and bonds fell by $2.8 billion to $1.11 trillion, according to Treasury Department data released Tuesday in Washington. It was the third straight month of declines and left the nation’s holdings the smallest since May 2017.

China remained the U.S.’s biggest foreign creditor. Japan was next, with $1.1 trillion, up by $37 billion from a month earlier, which was the biggest gain since 2013. The $9.2 billion gap between the two nations’ holdings was also the smallest since Japan was last the largest U.S. foreign creditor two years ago.

Overall, U.S. Treasury holdings by foreigners hit a new high, rising to $6.54 trillion. The previous record of $6.47 trillion was hit in March.
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https://www.bloomberg.com/news/arti...oldings-extend-drop-amid-trade-war-escalation

Japan carrying the water later it seems.
 

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Foreign holdings of Treasuries slumped in March by the most this century as pandemic-related global market turmoil sent U.S. debt yields plunging to record lows and volatility surged.

Total foreign ownership of Treasuries dropped $256.6 billion to $6.81 trillion, according to a report from the U.S. government released Friday. That’s the biggest drop in data stretching back to early 2000.
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“The countries which saw the biggest outflows in their holdings were Saudi Arabia, Brazil, India -- emerging market countries that were seeing large capital outflows,” said BMO Capital Markets Strategist Jon Hill. “It makes sense that they would have to sell Treasuries to defend their currencies at a moment like that.”
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Saudi holdings fell sharply, by $25.3 billion to $159.1 billion, a two-year low. And the totals of Japan and China are each still more than the combined totals of the next-largest holders, the U.K., Brazil, and Ireland.

The value of Japan’s holdings rose by $3.4 billion to $1.27 trillion, while those of China -- the second-largest holder -- sank $10.7 billion in March to $1.08 trillion.
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https://www.bloomberg.com/news/arti...drop-in-foreigners-treasury-pile-this-century

For context, this occurred as the Fed initiated $450B in swap lines and a FIMA Repo Facility (see posts 561 and 567 in the link below) that were designed to help foreign countries/central banks avoid selling Treasuries on the open market.

https://www.pmbug.com/forum/f13/tin...lity-total-perspective-vortex-75/index29.html
 
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