TIC Data: Foreigners Large Buyers of US Assets after QEII

Foreign investors stepped up their purchases of US assets in November after FOMC decided to resume its Treasury purchases. Foreign investors bought a net of $85 bln of US equities, notes and bonds after an upward revised $29 bln in Oct. The Nov purchases were the most in a few months (Aug). Perhaps related to QEII, foreign investors were net sellers of short-term US securities, like bills and stock swaps. When these short-term instruments are taken into account, foreign investors bought $39 bln of US assets, more than twice the $15 bln purchased in Oct.

Returning to long-term assets, private sector flows dominated. Foreign official accounts bought $4.7 bln while private sector bought $61.7 bln. US residents appeared to step up their purchases of foreign assets, purchases nearly $82 bln of long term securities.

Foreign investors purchased $13.3 bln of US equities after $16 bln in Oct. Foreign investors also took $4.7 bln in corporate bonds from $1.1 bln in Oct. China seemed to reduce their Treasury bond holdings by about $11 bln, but has we have noted flows could go through a different financial center, like London.

The net impact in the foreign exchange market is minimal. After pulling back initially in NY, the foreign currencies are bid.