US: Another record month of net outflows – Wells Fargo

Research Team at Wells Fargo, notes that the foreigners were net sellers of $202.8 billion worth of U.S. long-term portfolio securities in June and most of the outflows were in banks’ own liabilities to foreign residents.

Key Quotes

“Banks Decrease Liabilities to Foreigners

• June was another record month of outflows of long-term capital by foreign private investors. The steep decline in longterm capital in June was driven predominately by a $174.4 billion decline in banks’ own liability to foreign residents.

• After a steep sell off last month, U.S. investors were net purchasers in June, increasing their long-term foreign securities holdings by $11.2 billion.

U.K. Increases U.S. Treasury Holdings

• Month-over-month, the U.K. investors increased their holdings of U.S. treasury by $13.8 billion—the most next to Japan—as uncertainty surrounding the Brexit vote led investors to look for a safe haven. China has been steadily declining its U.S. treasury holdings (-$3.2 billion) but remains a top holder.

• Foreign central banks continue to dial back their holdings of U.S. Treasuries.”