Dear clients,
Foreign buying of US Treasury bonds in March rose to the highest level in more than two years, Treasury Department data showed on Monday, as investors bought government debt amid bank stress during the month.
US Treasuries rose to $7.573 trillion in March, up about $230 billion from $7.343 trillion the previous month. Monthly Treasury bond accumulation in March was the highest since June 2021, analysts at TD Securities said.
According to the cited data, March was particularly significant as it was a time of volatility in the banking sector. The most interesting point was the huge amount of treasury bond purchases. Investors were de-risking at the time because of banking stress. There was a lot of buying on the Chinese side, a lot of buying on the Japanese side. There were interesting purchases from the UK side or via the UK, indicating purchases by hedge funds.
The benchmark 10-year Treasury yield started March at 3.996%, falling by 50 basis points to 3.49% by the end of the month. In October last year the yield on 10-year US Treasuries reached a 15-month high of 4.338%.
Foreign inflows into Treasuries were $35.8bn per trade in March, up from $57.6bn in the previous month. US equities were also bought by foreigners, with inflows of $36.1bn following net sales of $16.2bn in February and outflows of $27.5bn in January.
US residents, meanwhile, increased their holdings of long-term foreign securities, with net purchases of $22.8bn compared with net sales of $8.3bn in February.
Overall, net purchases of long-term overseas securities totaled $133.3bn in March, up sharply from February’s inflow of $56.6bn, the data showed.
