Foreign accounts bought U.S. Treasuries in February but, in what ends a long streak, not equities. Net inflow of long-term securities totaled a sizable $49.0 billion in February led by Treasuries, at $33.2 billion, followed by government agency bonds at $11.8 billion, and corporate bonds at $4.1 billion. Pulling down the month's headline total by $8.9 billion was moderate buying of foreign equities and also foreign bonds by U.S. accounts.
Foreign accounts were net sellers of equities but only at a very modest $1.2 billion in February which followed late January as a very volatile time for the market. It will be interesting to see if foreign accounts increased their selling during March.
Chinese holdings of U.S. Treasuries, an ace in the hold in a possible trade war, rose $8.5 billion in the month to $1.177 trillion followed by Japan at $1.060 trillion for a monthly dip of $6.3 billion. Financial inflows are an important positive helping to offset the nation's growing trade and government deficits.