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Highlights
Foreign demand for U.S. securities is on a spike, showing a net long term inflow of $120.9 billion in June vs. $126.0 billion in May and $80.1 billion in April. The totals for June and May are double the nation's trade outflow!
Demand in June was centered where it often is, in Treasuries. Demand for agency debt was also very strong as was demand for equities, the latter showing rare strength in recent reports. Demand for corporate and other bonds was sizable but still slowed slightly, perhaps a reflection of trouble in the subprime market.
The demand for Treasuries doesn't appear to be coming from Asia as both China and Japan showed negative readings. UK holdings, as they did in May, spiked in what is a reflection of demand from UK's worldwide banking customers.
Surprisingly, financial markets showed no initial reaction to the results which should be a big plus for all U.S. markets. This report for July and especially August will be especially interesting for clues on how the subprime freeze up and recent money market dislocation affected international flows.
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