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Foreign Official Entities Dumped Stocks, TSYs In August As De-Dollarization Accelerates

Total Treasury International Capital Net Monthly inflows soared to $275.6bn in August - the latest data available from the Treasury - but we note that while private flows were a huge $292.95 billion, official entities saw net outflows of 17.3 billion...

The breakdown on the official entity side (reserve banks and sovereign funds) is as follows:

  • US Treasury Bonds & Notes -$7.689 billion

  • Long-term Agency Debt +$5.74 billion

  • US Corporate bonds +1.206 billion

  • US Equities -$9.009bn

That is the biggest equity sales since April 2020...

On the Treasury side, Japan was the biggest dumper of bonds (-$34.5billion), now down to iots lowest total holdings level since Dec 2019...

And the UK and Cayman Islands (hedge funds) were the biggest buyers (+$10.1bn and +$15.4bn respectively).

For the second straight month, China increased its holdings of US Treasuries in August (but the total holdings are still hovering at their lowest since mid-2010)...

Finally, we note that the trend of de-dollarization continues to accelerate globally with Treasury holdings falling and gold holdings steady...

Not a pretty picture amid Fed QT and Washington's largesse.

Tyler Durden Tue, 10/18/2022 - 16:22
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