Nomura N.American head of rate.....>

US TSYS/RESEARCH: Nomura N.American head of rate research George Goncalves eyed

the Aug. TICS data on foreign demand for US Treasuries, and said that "aggregate

foreign UST demand was up slightly to $11.5bn (vs -$0.5bn prior). However,

demand remains weak for most countries, especially considering the bond rally in

August."

- He said that "Europe added $7.7bn in total" in Tsys "(but was down from

$23.5bn in July), largely from UK flows of $11.1bn. Asian buyers added $6.1bn

USTs. But the distribution was not proportional as Japan sold -$4.5bn (largest

outflow in the past 4 months), while China bought $18.6bn (z-score of 1.60, the

second-largest since July 2015 with two of the largest flows happening in the

recent 3 months)."

- MNI reported the Mainland China holdings of Tsys were 19.1% of total (vs.

18.7% July) while Japan was 17.6% of Tsys total (vs. 17.8% July.)