J.P.Morgan note that Monday saw the Treasury release its “monthly TIC data on foreign transactions and holdings of U.S. securities for March, showing foreign investors on net bought $48.8bn long-term Treasuries over the month. Private institutions once again drove this flow, adding $80.8bn Treasuries, while official institutions shed $32.2bn, the largest net sale since April 2020. Geographically, most of the demand was concentrated in the UK and the Cayman Islands, suggesting that a large amount of short-covering took place during the month, consistent with the reduction in net short positioning amid the move to higher yields that we’ve been describing. Consistent with the MoF data our Japan rates research colleagues have been flagging, Japan recorded $32.6bn in monthly sales, the most on record for a single month. Further, as the available April data shows, these sales continued last month, albeit at a slower pace, with selling concentrated among banks.”
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