US: Strong foreign demand of financial assets – RBS

Analysts at RBS note that the foreign appetite for US financial assets shows few signs of waning.

Key Quotes

“Net foreign demand for long-term US securities rebounded to  $74.8bn in July after net sales of $36bn in June, driven by significant overseas buying of US securities and sizeable US sales of foreign financial assets.”

“Total Chinese holdings of US government bonds remained pretty steady in early Q3, at $1.17 trillion. So, there is little evidence China is divesting from US government bonds despite ongoing US/Sino trade tensions. China’s central bank has ruled out a forced devaluation of the Yuan, fearful of a repeat of marked capital outflows in early 2015.”