Follow-Up #2 on TIC Data

Wednesday, June 15, 2005

Today's release of the Treasury Inflow Capital (TIC) data brought a negative surprise. Net foreign purchases of both domestic and foreign long-term securities from US residents were 47.4 billion dollars in April compared with 40.6 billion dollars in March. Analysts has expected a net inflow around 70 billion dollars which is the amount needed to finance the current account deficit, currrently at 660 billion dollars. Net foreign purchases of long-term securities were 750.1 billion dollars in the twelve months through April 2005 as compared to 798.8 billion dollars during the twelve months through April 2004.
The US Treasury has resolved the mystery about revisions in earlier releases of TIC data that had raised questions on the reliability of these data sets, posted here and here.
A newly issued note on revisions says: For the monthly table showing Major Foreign Holders of U.S. Treasury Securities, revised data for roughly the past year are released in April or May to include preliminary results from the most recent annual survey of foreign holdings of U.S. securities. The June release will usually include the final results from that survey. The "RED ALERT" is withdrawn following this explanation.
Today's release shows that China's dollar debt holdings rose to 230.4 (223.5) billion dollars month-on-month. Most other holders showed small deviations from their former positions. Total holdings were 1.99 (1.97) trillion dollars.


Wikinvest Wire