Investing.com - Financial Markets Worldwide
👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

October TIC Data Shows Strong Demand For Treasuries

Published 12/31/2000, 07:00 PM
Updated 12/15/2008, 09:25 AM
USD/JPY
-


 
Release Explanation: The Treasury Investment Capital (TIC) report is a measure of foreign investment flowing into the US Equity, Treasury, and Bond Markets, minus the amount of US investment heading abroad. It is important since a certain amount of foreign investment is currently needed in the US to fund our “twin deficits” the Trade and Current Account Balances. Trade and Current Account Balances: the size of the US Public debt and Imports exceeding Exports means the US needs foreign investment to fund the shortfalls. A miss on the TIC Data moves the Markets one way or the other because Institutions have to realign existing positions in response to the next Quarter and half Year targets. 
 
Money that flows into or out of US Markets will always impact the US Dollar, an increase in overseas investments can only be funded in US Dollars so a local Currency is being sold, US Dollars are bought, and then those US Dollars are transferred into Treasuries. By the time this report is released, this process of swapping Currencies has already happened and may not have an instant impact on the US Dollar.  It does however give a good idea of the US Dollar sentiment.
 
Trade Desk Thoughts: The Treasury reported that net foreign purchases of long-term securities were $1.5 billion in October. Net foreign purchases of long-term U.S. securities were negative $34.8 billion. Of this, net purchases by private foreign investors were negative $17.5 billion, and net purchases by foreign official institutions were negative $17.2 billion. U.S. residents sold a net $36.3 billion of long-term foreign securities.

 
Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $92.4 billion. Foreign holdings of Treasury bills increased $147.4 billion.
 
"As the fear spread during October, demand for treasuries exploded," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. The big move into Treasuries was dollar positive against the higher yielders but led to depreciation against the yen."
 
Forex Technical Reaction: S&P futures were recenly trading down 2.75 points in a session where very little range has been seen. Currency valuations didn't noticably change after the report but USD/JPY seems to be finding a bottom in the 90.25 area.

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.