Indicator Digest - CMS Forex

Foreign Captial Flows

These indicators measure flows of foreign capital across borders. The reports measure the monthly value of purchases by foreigners of domestic securities, debt, and assets. Long-term securities are looked at more closely than short term flows for underlying fundamentals, while short term flows can show reaction to market crises.

Main Indicator: Net Long-term TIC Flows

Most Recent Release

May
15th, 2008

Actual

Forecast

Revised Form

80.4B

63.6B

64.9B

72.5B

For March
Provided by: Department of Treasury
Official Release: Press Release

Monthly Net TIC Flows: $-48.2B, forecast $67.5B, pr. $48.9B (rev from $64.1B)

The Treasury International Capital report, or TIC, showed that net foreign acquisitions of long-maturity US securities, excluding non-market flows such as stock swaps and principal repayment on asset-backed securities, totaled $80.4 billion in March, and the February figure was revised down to $48.9B. Total net foreign purchase of long-term securities amounted to $54.2B.

The monthly Net TIC flow, which excluded non-market flows, short-term securities and changes in bank's dollar holdings, saw a decline of -$48.2B. This is the most comprehensive category and shows that the US is attracting short term but not long term capital flows. The TIC report is important in gaging how well the US is able to finance its trade deficit.

Table of Past Data

	9/18	10/16	11/16	12/17	1/16	2/15	3/17	4/15	5/15

Actual	19.2B	-69.3B	26.4B	$114.0B	90.9B	$56.5B	62.0B	72.5B	80.4B
Forecast	99.0B	60.0B	72.0B	$49.0B	70.0B	$71.0B	60.0B	55.0B	63.6B
Previous	97.3B	19.5B	-70.6B	-$15.4B	114.0B	$90.9B	56.5B	57.1B	64.9B
Revised From	120.9B	19.2B	-69.3B	$26.4B	N/A	N/A	N/A	62.0B	72.5B

Past Releases

April
15th, 2008

Actual

Forecast

Revised Form

72.5B

55.0B

57.1B

62.0B

For February
Provided by: Department of Treasury

Total Net TIC Flows: 64.1B, forecast $72.5B, pr. $37.4B

Net long term TIC flows beat the consensus forecast, totaling $72.5 billion in February, while total TIC flows for the month reached $64.1 billion. The solid showing of interest in US treasuries is a good sign that foreigners are buying US debt and therefore helping the Dollar.

Following better than expected NY Empire Manufacturing data, the TIC report helped extend gains by the Dollar vs the Euro and Yen in the hour after the release.

March
17th, 2008

Actual

Forecast

Revised Form

62.0B

60.0B

56.5B

N/A

For January
Provided by: Department of Treasury
Official Release: Press Release

Total Net TIC Flows: $37.4B, forecast $85.0B, pr. $60.4B

Total Foreign Capital Inflow, which is the broadest measure which includes non-market flows, short-term securities and changes in banks' dollar holdings, fell to $37.4 billion in January, a decline of almost 50% from the previous month. Net foreign private flows were negative $38.2 billion, though net foreign official flows were positive $75.5 billion.

Central banks stepped up their purchases of Treasury notes ($36.1 billion compared to $11 billion in Dec), and private foreign investors bought a net $1.5 billion, after making net sales of $9.8 billion the previous month.

The EUR/USD and USD/JPY were little changed directly after the release.

February
15th, 2008

Actual

Forecast

Revised Form

$56.5B

$71.0B

$90.9B

N/A

For December
Provided by: Department of Treasury
Official Release: Press Release

Total Net TIC Flows: $60.4B, forecast $70.0B, pr. $150.8B

"Net foreign purchases of long-term securities were $56.5 billion.

Net foreign purchases of long-term U.S. securities were $69.1 billion. Of this, net purchases by foreign official institutions were $35.8 billion, and net purchases by private foreign investors were $33.3 billion.

U.S. residents purchased a net $12.6 billion of long-term foreign securities. Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to havenbeen $45.2 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities increased $34.2 billion. Foreign holdings of Treasury bills increased $15.5 billion.

Banks’ own net dollar-denominated liabilities to foreign residents decreased $19.0 billion.

Monthly net TIC flows were positive $60.4 billion. Of this, net foreign private flows were positive $8.4 billion, and net foreign official flows were positive $52.1 billion."

January
16th, 2008

Actual

Forecast

Revised Form

90.9B

70.0B

114.0B

N/A

For November.
Official Release from the Treasury Department

Net foreign purchases of long-term securities were $90.9 billion, lower that October's $114.0 billion. Monthly net TIC flows were positive $149.9 billion, jumping form last month's $92.2 billion. Acquisition of long-term securities totaled $79.9 billion in the month.

December
17th, 2007

Actual

Forecast

Revised Form

$114.0B

$49.0B

-$15.4B

$26.4B

For October
Release from Department of the Treasury

Total TIC Flows: $97.8B, forecast $30.0B, pr. -$32.8B

After two months of outflows, October recorded a recovery of appetite in US securities, and tripled expectations. Private flows were positive $56.2 billion while official flows were positive $41.6 billion.

November
16th, 2007

Actual

Forecast

Revised Form

26.4B

72.0B

-70.6B

-69.3B

October
16th, 2007

Actual

Forecast

Revised Form

-69.3B

60.0B

19.5B

19.2B

For August.

Foreigners sold a record amount of U.S. securities after credit costs jumped in August, following turmoil in the financial markets. Total holding of equities, notes and bonds fell a net $69.3 billion after an increase of $19.2 billion in July, according to the Treasury Department. Including short-term flows such as Treasury bills, foreigners sold a net $163 billion. Even though the headline seems severe, September and October saw improvements in global stock markets, and an almost return to normal market behavior. That may imply that the August number is an outlier, and somewhat dated, and that next month's data may see an improvement.

The dollar pared some its gains against the euro, pound, and Canadian dollar after the data, but overall it remained up on for the session.

September
18th, 2007

Actual

Forecast

Revised Form

19.2B

99.0B

97.3B

120.9B

Net long-term flows includes cross border acquisitions of securities with maturities of more than one year. Buying of long term securities took a big step back as it totaled $19.2 billion in July, compared to last June's $97.3 billion, a report by the Treasury Department revealed.

The TIC data is used as a gauge of how easily the US can finance its trade deficit, and this data is now dated as it came before August's financial market turmoil. The dollar fell after the release, even as PPI showed some easing to producer prices.