Foreign Official Entities Dumped Stocks, TSYs In August As De-Dollarization Accelerates

Total Treasury International Capital Net Monthly inflows soared to $275.6bn in August – the latest data available from the Treasury – but we note that while private flows were a huge $292.95 billion, official entities saw net outflows of 17.3 billion…

The breakdown on the official entity side (reserve banks and sovereign funds) is as follows:

US Treasury Bonds & Notes -$7.689 billion

Long-term Agency Debt +$5.74 billion

US Corporate bonds +1.206 billion

US Equities -$9.009bn

That is the biggest equity sales since April 2020…

On the Treasury side, Japan was the biggest dumper of bonds (-$34.5billion), now down to iots lowest total holdings level since Dec 2019…

And the UK and Cayman Islands (hedge funds) were the biggest buyers (+$10.1bn and +$15.4bn respectively).

For the second straight month, China increased its holdings of US Treasuries in August (but the total holdings are still hovering at their lowest since mid-2010)…

Finally, we note that the trend of de-dollarization continues to accelerate globally with Treasury holdings falling and gold holdings steady…

Not a pretty picture amid Fed QT and Washington’s largesse.