Foreign investors put $207.1bn into long-term American securities in June, and almost all of it went into stocks rather than government debt

Foreign investors bought $207.1bn of long-term American securities in June. Equities took $181.4bn of it.

Treasury published the June capital flows on Monday afternoon. The headline number is large, and the composition is the story: private foreign investors bought $144.7bn of equities and official institutions another $36.7bn, while combined net buying of Treasury bonds and notes came to $6.8bn.

Official accounts sold government debt

Foreign official institutions were net sellers of Treasury bonds and notes in June, at $9.8bn. Private foreign investors bought $16.6bn, down from $53.6bn in May. Foreign residents also cut their holdings of Treasury bills by $29.0bn.

The four months the release prints side by side make the direction plain. Combined official and private buying of Treasury bonds and notes ran at $13.6bn in March, $50.5bn in April and $56.6bn in May, before falling to $6.8bn in June.

The holdings table agrees, with a caveat

Treasury's table of major foreign holders puts total foreign holdings of Treasury securities at $9,299.0bn at the end of June, down $72.1bn on May. Almost the entire fall sits in official accounts, which dropped $69.9bn to $3,778.1bn. That is the lowest reading in the thirteen months the table prints.

Japan held $1,116.7bn, down $26.4bn on the month. China held $633.4bn, down $25.9bn. The United Kingdom held $939.9bn, down $8.7bn on May and up $84.3bn on a year earlier.

Read that table carefully. Holdings are reported at fair value, so a month in which prices fall shows smaller holdings without anyone having sold anything, and Treasury's own note on the table says custodial reporting cannot attribute ownership to a country with precision. A Treasury security bought by a foreign resident and held through a custodian in a third country is recorded in the third country.

The next release, covering July, is scheduled for September 16.