JPM Look For Improved Foreign Demand Over The Balance Of This Year

J.P.Morgan note that "this afternoon Treasury released its monthly TIC data on foreign transactions and holdings of US securities for July, showing foreign investors sold $22.8bn long-term Treasuries over the month. Official institutions drove this net sale, shedding $20.7bn long-term securities over the month, the largest since April. From a geographic perspective, the Euro Area drove most of this selling: Ireland represented a significant share and has sold Treasuries in 11 of the last 12 months. Conversely, demand emanated once again from the Cayman Islands, indicating renewed levered demand for Treasuries as market conditions have continued to normalize. Looking ahead, we think the backdrop is supportive of improved foreign demand over the balance of this year, driven largely by growth in private demand."