Held down by increasing US investment overseas, net inflow of long-term securities slowed to $23.6 billion in May for the weakest reading of the year. US resident outflow totaled $21.0 billion, up from $14.2 billion in April and compared with $30.6 billion in March. Low US yields are likely pushing investment overseas and limiting investment at home.
Foreign buying of US long-term securities totaled an in-trend $44.6 billion in May and was centered in Treasuries along with a respectable total for equities. Foreigners sold government agency bonds during the month though they were moderate buyers of US corporate bonds. Foreign purchases were roughly split evenly between private investors and official institutions.
A look at foreign holdings of Treasuries shows incremental gains for China, to $1.16 trillion, and Japan, to $912.4 trillion, with a slightly more than incremental gain for UK accounts to $346.5 billion. OPEC, the fourth largest holder of Treasuries, shows a more than $8 billion gain to $229.8 billion. Russia, the ninth largest holder, fell more than $10 billion to $115.2 billion.