Five Things to Look for in the TIC Data

The US reports the TIC data at the close of markets today for the month of September.  In August the TIC data showed $74.5 bln net foreign portfolio capital flowed to the US.  The bulk, or a little more than $52 bln of this was long-term flows.

The data typically does not move markets, and since the release has been pushed back until the close of markets, this seems doubly true.   Still, there are five things to look for: 

1.  Japan's MOF data showed Japanese investors bought about  $3.5 bln of US bonds in  September, which is about half as much as they bought in August. If they did not transact through a US bank, it will not be reflected in the TIC report.  The same MOF data shows Japanese investors sold about $570 mln of US equities in September.  This too may or may not show up in the TIC data.  

2.  The market is always interested in what China is doing.  In August, China bought about $5 bln of US Treasury bonds.  Their holdings have been generally flat this year, according to the TIC data.  In August, the US Treasury reckons China held $1.269 trillion of Treasury bonds.  At the end of last year, they held $1.270 trillion.  

3.  In August, the TIC data shows Russia bought about $4 bln of US Treasuries.  The rouble was under strong downside pressure in September.  The dollar rose from about RUB36 to RUB40.  The central bank is thought to have intervened in size.  Maybe it sold some Treasuries.  US TIC data indicates Russia sold about $20 bln of US Treasuries this year through August.  

4.  Belgium has been a large accumulator of US Treasuries.  These holdings seem tied to EuroClear.  In August 2013, Belgium held $166.8 bln of Treasuries.  In August 2014, their holdings stood just below $360 bln.  That said, Belgium's holdings peaked in March near $381.5 bln.  

5.  The US dollar was strong in September.  It rose against all the emerging market currencies.  The yuan, which rose by 0.07% according to Bloomberg was the main exception.  Several emerging market countries were thought to have intervened in the foreign exchange market. Often the intervention involves the sale of dollar.