The Treasury Department released its monthly report on cross-border financial flows for September today. Here is a quick recap-

Monthly net treasury international capital flows were $142.4 billion. Of this, net foreign private flows were $126.9 billion, and net foreign official flows were $16.4 billion.

In August, that number stood at -$0.4 billion. This is the largest increase since January 2006.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $11.6 billion. Foreign holdings of Treasury bills increased $89.9 billion.

Net foreign purchases of long-term U.S. securities were $30.9 billion. Of this, net purchases by private foreign investors were $35.7 billion, and net purchases by foreign official institutions were negative $4.8 billion.

In a nutshell, private foreign investors are now stockpiling on short and long-term US securities, enough to offset the widespread attrition from foreign governments in the past few months. Net foreign purchases of long-term U.S. securities witnessed a nice gain, after a $8.8 billion retreat in August. Treasury Bonds and notes have, once again, been quite popular, as flows were a positive $20.7 billion in the month of September. This may have been a result of flight-to-quality and risk aversion practiced by many.

US equity purchases were up $11.5 billion for the month between both private and public investors, after a $1 billion loss in August.

In the last year, net foreign purchases of long-term US securities stood at $791.7 billion, less than the $1 trillion plateau we have been accustomed to. This number is likely to fall even further as the volatile months of October and November are not accounted for.

Read Full Report.

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