Treasury International Capital (TIC) Update June 2009

The Treasury Department this morning released it's monthly Treasury International Capital (TIC) update. Despite the two month lag time in the data, the TIC update serves as an instructive indicator of foreign appetite for US Treasury bonds and notes. I'll try to update the chart on a monthly basis to include a 24 month rolling snapshot of net foreign purchases of US Treasury bonds and notes. The data provided by Treasury breaks the headline net purchase number into categories based upon the nature of the foreign entity, i.e Foreign Official Institutions, Other Foreigners, and International & Regional Organizations. Barring any substantial deviations in the purchasing ratios between these three groups though, the headline figures from the chart above should suffice in gleaning the overall picture. Other notable data points from the release:

• US residents net purchases of foreign securities for the month totaled $32.9Billion
• Banks' net dollar liabilities to foreign residents decreased by $82.9Billion

I would expect the next couple months worth of data to indicate an even larger increase in foreign holdings of US debt, due simply to the record breaking size of Treasury auctions that were conducted in those months. For now, it appears that the US is still a parking garage for the world's surplus capital.

*research for this post facilitated by InfoNgen Sphere: Related Content