Demand for US Assets Remains Strong Despite Slowing Capital Flows
Net buying of long-term US securities remained robust in June 2026. Treasury International Capital (TIC) data showed net long-term purchases reaching US$172.7 billion, surpassing the market forecast of US$151.4 billion. Although it exceeded expectations, the figure represented a decline from the previous month's level of approximately US$231.2 billion.
The US Treasury Department reported that foreign investors made net purchases of long-term US securities totaling US$207.1 billion during June. Purchases by private foreign investors amounted to US$169.8 billion, while official foreign institutions recorded net purchases of approximately US$37.3 billion. After accounting for US investor transactions in foreign assets and other adjustments, overall net long-term purchases stood at US$172.7 billion.
A breakdown of the data reveals that foreign investor interest in US stocks remains quite strong. Net equity purchases by private foreign investors reached approximately US$144.7 billion in June. However, demand for certain fixed-income instruments—including US government bonds—appeared weaker, and foreign investors reduced their holdings of Treasury bills by US$29 billion. These conditions indicate that capital continues to flow into the United States, though the composition is not solely concentrated in government debt securities.
The better-than-expected data suggests that US financial assets retain their appeal for global investors and could theoretically support the US dollar. However, the decline from the previous month indicates that the momentum of capital flows is beginning to slow. As TIC data is not a primary driver of Federal Reserve policy, market attention is expected to remain focused on inflation, labor market conditions, the outlook for Fed interest rates, and geopolitical developments in the Middle East.(CP)
