Instant Insight - TIC Data Not Completely Dollar Bullish
Net foreign purchases of US Securities increased by $75.1 billion in the month of June, which was much stronger than the market's forecast for a $65.0 billion increased. However the strong TIC data not completely bullish for the US dollar. Foreign central banks were net sellers of US Treasuries, confirming the overall trend of reserve diversification. Aside from the UK, no one was a major buyer. Japan, the world's largest holder of US Treasuries actually sold Treasuries for the fourth month in six. The high yield of US fixed income investments is the only thing that is keeping foreign investors here. Private demand is driving the boost with as June marked the strongest level of private inflows since November. The weakness of the equity markets in June led to an overall exodus of stocks into bonds. Although this is enough to appease those concerned about the trade deficit, it is only pushing back the concern rather than eradicating it.