Foreign accounts were solid buyers of long-term U.S. Treasuries in June, as TIC data show a net inflow of $34.4 billion vs May's unusually large $91.9 billion. Foreign buying was centered in Treasuries, at a net inflow of $19.3 billion, followed by government agency bonds at $17.2 billion. Corporate bonds show a small inflow and equities a small outflow. On the other side of the ledger, U.S. accounts were small net sellers of foreign securities which added slightly to the headline total.
Chinese accounts, which had been paring their holdings of U.S. Treasuries, added substantially in June, at a net $44.3 billion for a $1.15 trillion total. Japanese accounts shaved their holdings by more than $20 billion in the month to $1.09 trillion. How and whether Chinese holdings have been reacting to trade and geopolitical tensions will play out in future reports. But this report for June is a positive for the U.S. outlook, showing strong demand for U.S. assets in what is an offset to the nation's trade and government deficits.