|
Highlights
Net foreign purchases of long-term U.S. securities showed an inflow of $26.4 billion in September vs. an outflow of $70.6 billion in August. The $26.4 billion total is small by average standards but is still a relief for U.S. investors and the U.S. Treasury following August's shocking outflow when foreign financial firms, lacking access to credit during the month's great squeeze, were apparently forced to sell long-term investments to fund their operations. Including short-term securities, September saw a net outflow of $14.7 billion vs. an outflow in August of $150.7 billion. But the short-term data reflect volatility in the overnight credit markets, not foreign willingness to hold U.S. securities.
After a roughly $40 billion net outflow in equities during August, September saw a solid enough $2.5 billion inflow that is consistent with the stock market's rebound. Treasuries also bounced back to inflow from outflow at a net $26.3 billion. Inflows were also scored for agency bonds and corporate bonds. By regional affiliation, gains were centered among U.K. institutions which enjoy a wide international base of customers.
Today's data indicate that investment flight out of the U.S. was isolated to August, though the modest inflow in September, which is well under the nation's roughly $60 billion per month trade deficit, does raise the question whether the U.S. will remain a favored center of foreign investment. Markets showed little initial reaction to the data.
|
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}