Foreign selling of U.S.
Treasuries in April was most since 1978: data
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[June 16, 2016]
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - Foreign investors
sold a record amount of U.S. Treasury bonds and notes for the month
of April, according to U.S. Treasury Department data on Wednesday,
as investors priced in a few more rate increases by the Federal
Reserve this year.
Foreigners sold $74.6 billion in U.S. Treasury debt in the month,
after purchases of $23.6 billion in March. April's outflow was the
largest since the U.S. Treasury Department started recording
Treasury debt transactions in January 1978.
Private offshore investors sold $59.1 billion in U.S. government
bonds, while foreign official institutions, which include central
banks, sold $12.3 billion.
U.S. economic data in April included a decent non-farm payrolls
report for March, along with strong manufacturing as measured by the
Institute for Supply Management. That prompted investors to sell
Treasuries in April, as did an upswing in risk appetite, with
buoyant global stocks and rebounding oil prices.
Yields on U.S. 10-year Treasury notes at the beginning of April were
1.7910 percent, and they hit a high of 1.9410 late in the month.

China remained the largest foreign holder of U.S. government debt,
although its holdings in April declined to $1.2443 trillion, from
$1.245 trillion in March. U.S. Treasury holdings of the world's
second largest economy declined for a second straight month.
Japan, the No. 2 foreign U.S. Treasury debt holder, posted higher
U.S. government debt holdings of $1.143 trillion from $1.137
trillion in March. Japan raised its U.S. Treasury holdings for a
fourth straight month.
The report also showed for a second consecutive month U.S. Treasury
holdings of Saudi Arabia and other oil-producing countries. Saudi
Arabia has the largest Treasury holdings among the Gulf oil
exporters with $113.0 billion, down from $116.8 billion the previous
month.
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United States one dollar bills are seen on a light table at the
Bureau of Engraving and Printing in Washington November 14, 2014.
REUTERS/Gary Cameron/File Photo

Overall, foreign central bank holdings of U.S. Treasuries contracted to $6.239
trillion in April, from $6.287 trillion in March.
Data also showed that foreigners sold long-term U.S. securities in April after
buying them for the previous two months.
Offshore investors unloaded $79.6 billion in long-term U.S. assets, after
purchasing $78.1 billion the previous month. Including shorter-dated securities,
however, overseas investors bought $80.4 billion in April after selling $98.1
billion in March.
U.S. stocks, meanwhile, showed outflows for a third straight month, with
foreigners selling $2.8 billion in April from $16.5 billion in March. Foreigners
have sold U.S. equities in eight of the last nine months.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alan Crosby and David
Gregorio)
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