Foreigners BTFD In US Equities In December As TIC Flows Show China’s ‘Official’ Treasury Dump Continues

It appears that foreigners bought the f**king dip in December as US equities tumbled, foreign official institutions bought $1.5Bn, Private foreigners bought $53.5Bn. That is the biggest buying since Dec 2020…

Foreigners, in aggregate, also bought US Treasuries for the 8th straight month, though at a considerably slower pace…

…yet curiously, foreign official institutions (central banks, wealth funds, reserve managers), have sold Treasuries for 14 straight months…

…while foreign private investors bought Treasuries for 14 straight months…

In total, December saw foreigners (in aggregate) buying US assets across the board:

• Long-term Treasuries: $19.98BN vs $54.2BN in November

• Agencies: $13.9BN purchased vs $22.0BN in November

• Corporate bonds: $14.38BN purchases vs $21.5BN in November

• Corporate Stocks: $54.98BN purchased – the most since Dec 2020 – vs $42.9BN in November

Drilling down, we see China continue to ‘sell’ down its US Treasury holdings, but we do note that both Belgium and Luxembourg (which in the past have acted as proxies for China buying) saw UST holdings rise…

• China holds $867.1b of US Treasuries, a decrease of $3.1b from last month

• Belgium holds $354.3b of US Treasuries, an increase of $21.4b from prior month

Source: Bloomberg

So did ‘China’ really dump USTs?

Source: Bloomberg

Japan, the largest holder of Treasuries, sold $6bn of its holdings (to $1.1tn).

Finally, we continue to broadly see the trend of de-dollarization with gold holdings on the rise as UST holdings drift lower…

Source: Bloomberg