Saudis Dumped Record Amount Of US Treasuries In April As Gold Reserve Holdings Rise

Saudis Dumped Record Amount Of US Treasuries In April As Gold Reserve Holdings Rise Tyler Durden Mon, 06/15/2020 – 16:14

Foreign holdings of U.S. government debt fell to a four-month low in April, as the COVID-19 pandemic shut down most of the global economy.

Foreign TSY sales eased from $ 299BN in March to $ 177BN in April and while foreigners bought $ 10.9BN in corporate bonds in April, up from $ 3.2BN in March, they sold $ 5.6BN in corporate stocks in April, from $ 7.1BN in purchases in March, and the biggest selling since Aug 2019.

The biggest seller by far was Saudi Arabia who dumped almost $ 60 billion in US Treasuries in March and April (as oil prices collapsed)…

Source: Bloomberg

China and Japan also reduced their US Treasury holdings.

The total for China — the second-largest holder of U.S. government debt — shrank by $ 8.8b in April to $ 1.07t

Source: Bloomberg

Japan still has the largest pile of Treasuries outside the U.S.; the value of its holdings fell $ 5.7b to $ 1.27t

Source: Bloomberg

Interestingly, Ireland, the fourth-largest holder, boosted its holdings to $ 300.2b, the highest since Aug. 2018, from $ 271.5b.

Source: Bloomberg

As a reminder, The Fed’s FX swap lines were also in place throughout April, offering foreign central banks an alternative to selling Treasury holdings to meet their dollar-funding needs and support their currencies.

LTM selling of TSYs by foreign central banks and reserve managers rises to $ 372.3BN, just shy of the $ 397BN record in Nov 2016.

And finally, we note that while gold holdings are soaring, safe-haven flows into TSY (Within Fed Custody) also rose…




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