[lbo-talk] US October capital inflows below expectations

Doug Henwood dhenwood at panix.com
Wed Dec 15 06:41:48 PST 2004


US net capital inflows $48.1 bln, below forecasts Wed Dec 15, 2004 09:01 AM ET

WASHINGTON, Dec 15 (Reuters) - Foreign investment in U.S. assets fell sharply in October to the lowest level in a year, according to a Treasury Department report on Wednesday.

Net inflows of capital totaled $48.1 billion in October, after an upwardly revised $67.5 billion in September, the Treasury's International Capital report said. That was the lowest level since October 2003, when inflows were $27.5 billion.

The report showed a lower-than-forecast level of foreign interest in U.S. assets. Analysts had expected the October data to show foreign inflows in the range of $50 billion to $73 billion, and one trader had said a net inflow below about $60 billion would likely be perceived as negative for the dollar.

Purchases of net domestic securities, a narrower measure that excludes transactions between U.S. residents and foreigners in foreign stocks and bonds, dipped to $63.3 billion in October from $64.7 billion in September.

Foreigners were net buyers of U.S. stocks in October after two months of net sales, according to the report. They bought a net $3.8 billion in equities in October after selling a net $3.1 billion in September.

Foreign appetite for U.S. government bonds and notes increased in the month. Foreigners bought a net $18.3 billion in October, up from $15.8 billion in September.

Market participants watch the report, informally known as the TIC data series, as a measure of foreigners' appetite for U.S. assets, and it is of interest to the currency market amid concerns about the American current account deficit. The October U.S. trade gap was $55.5 billion.



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