China’s US Treasury Holdings Plunge To 10 Year Lows After Dumping In August

China’s US Treasury Holdings Plunge To 10 Year Lows After Dumping In August

Foreign holdings of U.S. government debt rose in August to a record $7.56 trillion as demand from Japan sent that nation’s stockpile to a fresh all-time high. There was net buying across all the asset-classes:

Long-Term bonds: August +$30.7BN, vs +$10.2BN in July

Corporate stocks: +$8.7BN, vs -$34.3BN

Corporate Bonds: +$14.7BN, vs -$11.0BN

Agencies: +$17.7BN, vs +$20.7BN

Although none of it was dramatic:

But the headline misses some nuance as foreign central banks and reserve managers (oil exporters) dumped a lot of Treasuries, down $20.9BN but Private entities bought a whopping $51.6BN – the second biggest buy since Aug 2018.

In fact foreign central banks have dumped USTs for 4 straight months…

As we mentioned above, Japan was Augist’s big buyer of USTs, pushing its overall holdings to a record high…

Source: Bloomberg

And UK was also a major buyer – also pushing its holdings to a record high…

Source: Bloomberg

But the big headline was the fact that China dumped over $21 billion of Treasuries in August (the latest TIC data), cutting its overall holdings to the lowest since August 2010…

Source: Bloomberg

And there’s no sign of any unwind in the de-dollarization trade…

Tyler Durden
Mon, 10/18/2021 – 16:17

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