Highlights
Net foreign purchases of U.S. long-term securities were surprisingly weak in December, at only $15.6 billion. But the disappointment is offset in part by robust levels in prior months: $84.9 billion in November, $93.5 billion in October, and $77.7 billion in September. TIC levels are often compared against the nation's monthly trade gap for an indication of currency flow. The monthly trade gap, the latest data reported just yesterday, has shown an improving trend at just about $60 billion.

One plus in the December TIC report is that weakness was centered in Treasuries which otherwise is a very strong category and is almost certain, especially given this month's very strong Treasury refunding, to show improvement in future reports. Foreign investors showed continued strong appetite for our agency bonds and especially once again for our corporate bonds. The demand for corporate bonds offers a striking contrast to foreign demand for our equities, which remains very weak with an $11.6 billion contraction in December.

This report often has a special impact on the currency market as it did this morning, tripping an immediate slide in the dollar. Treasuries showed no reaction to the report. One month's data are only one month's data and this disappointment will have to be confirmed by future reports before any conclusions of a shift in foreign demand for U.S. securities can be drawn.

2007 Release Schedule

Released On: 1/17 2/15 3/15 4/16 5/15 6/15 7/17 8/15 9/18 10/16 11/16 12/17 Released For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct