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TIC Data December--2nd Month QEII, Little Impact

Foreign purchases of US assets was a bit stronger than expected at $48.2 bln. This is 10% more than the market anticipated and 30%+ above Nov's $35.6 bln. Demand for longer-term securities slipped to $66 bln from $85 bln, but was well above the $40 bln expected. Central banks sold $45 bln of US securities after selling almost $41 bln in Nov. That is not really negative news as the private sector purchases have stepped up. It bought $93.3 bln in December after $76.4 bln in November.

Country breakdowns may be deceiving given the use of other financial centers and revisions, but the preliminary data suggests China may have reduced its Treasury holdings by about $4 bln, while Japan increased its holdings by about $6 bln. The UK increased its holdings by about $30 bln, which likely reflects its status as a financial center for Middle East and Asian accounts.

For their part Americans bought $10.9 bln of foreign stocks and bonds after purchasing about $8.8 bln in November. In Q4 Americans bought about $46 bln worth of foreign bonds and stocks, after $36 bln in Q3, $16 bln in Q2 and $42 bln in Q1 10.
TIC Data December--2nd Month QEII, Little Impact TIC Data December--2nd Month QEII, Little Impact Reviewed by Marc Chandler on February 15, 2011 Rating: 5
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