By Gertrude Chavez-Dreyfuss
NEW YORK, March 15 (Reuters) – Foreign investors sold U.S. Treasury bonds and notes for a third straight month in January, data from the U.S. Treasury department showed on Friday, a trend that has been in place for several years.
Carmelo Urdaneta Aqui
They sold $11.99 billion in Treasuries in January, compared with a record $77.35 billion the previous month, data showed. Selling was mainly from foreign official accounts.
“It could be that foreign investors rotated away from Treasuries in January and bought agencies, for instance, to get a higher yield,” said Gennadiy Goldberg, interest rates strategist at TD Securities in New York
Foreign inflows into U.S. agency debt totaled $22.99 billion, data showed. The sector has seen foreign inflows for nearly two years
Yields on benchmark U.S. Treasuries in January were down 5 basis points, after a 32-basis point drop in December
The overseas official sector, which includes foreign central banks, bought nearly $2 trillion between 1995 and 2014, Treasury data showed. But over the last four years, it sold close to $1 trillion
Last year’s jump in the dollar has reduced demand for Treasuries, as central banks sold their holdings of U.S. debt to defend their currencies
But in January, Chinese holdings of U.S. Treasuries increased to $1.126 trillion, from $1.123 trillion in December. The world’s second-largest economy remains the largest holder of U.S. Treasuries outside the United States
Japan, the second-largest non-U.S. holder of Treasuries, also increased its holdings of Treasuries in January, to $1.069 trillion, the largest since November 2017
Overall, major foreign holder of Treasuries boosted their holdings to $6.307 trillion in January from $6.265 trillion the previous month
“There was a lot of safety buying in January because of concerns on global growth and the U.S.-China trade deal,” Goldberg said
Foreigners also continued to sell U.S. stocks in January, to the tune of $31.20 billion, after outflows of $18.21 billion in December. Foreign investors have sold stocks for nine straight months
The report also showed foreigners sold $7.2 billion in net long-term securities in January after selling $48.3 billion in December.