Foreigners pull back in week of record Treasuries supply

[April 10, 2018]  NEW YORK (Reuters) - Foreign investors and central banks purchased fewer U.S. Treasuries in late March when the government sold a record high $294 billion of debt securities, Treasury Department data released on Monday showed.

Market attention to foreign holdings of Treasuries has increased in recent weeks as speculation has grown on whether China and other nations may consider reducing their U.S. debt holdings as a way to retaliate against tariffs and other trade restrictions imposed by the Trump administration.

While overseas appetite for Treasuries retreated, investment funds stepped up their buying of U.S. government debt.

Overseas investors, another major group of holders of U.S. government debt, bought $3.941 billion of the latest 2-year supply, down from $4.901 billion they purchased the previous month, according to the Treasury Department’s auction allotment data.

They bought $5.059 billion of the latest 5-year note supply, less than the $6.799 billion they purchased the previous month.

Foreigners bought $4.609 billion of 7-year debt versus $7.461 billion they purchased in February, the data showed.

Meanwhile, investment managers bought $13.005 billion at a two-year note auction held in March, up from $11.124 billion they purchased the previous month.

Fund managers bought $18.808 billion of 5-year notes,

more than the $15.936 billion they purchased the previous month.

They bought $14.255 billion in 7-year debt, more than $13.689 billion in February.

(Reporting by Richard Leong; editing by Diane Craft)

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