Highlights
Net foreign purchases of long-term securities declined in June to $53.4 billion from a revised $83.2 billion in May ($67.0 billion previously reported). The revision along with a smaller upward revision to April should offset any disappointment from June's lower level. The average for this reading over the last four months is $82.5 billion, very solid but still below the combined $100 billion needed each month to match the trade and federal deficits.

Net purchases from private investors, at $47.8 billion, slowed in June with demand from government institutions steady at $14.9 billion. Foreign demand for Treasuries was solid in the month at a net $28.3 billion. Strong demand for recent Treasury auctions likely reflects strong demand from overseas. Demand for federal agency bonds was also strong in June, at $31.5 billion and belying trouble in the mortgage market. But demand for corporate bonds slowed while demand for equities contracted, the latter showing a net outflow of $1.8 billion. Country data show net strength out of Japan, slowing demand from oil exporters, and contracting demand from China.

Foreign demand for U.S. assets remains very strong considering the trade and government deficits and also considering the weakness of the dollar which up until this month has shown record year-on-year contraction near 10 percent (trade-weighted). Ongoing strength in the dollar, combined with weakening economic conditions in Europe and Japan, may very well point to greater foreign demand through the second half. Markets showed no reaction to the report.

2008 Release Schedule

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