Thursday saw Goldman Sachs note that........>

US TSYS: Thursday saw Goldman Sachs note that "foreign investors were a major

source of the net Tsy sales in Mar, contributing to the imbalanced order flow

that led to impaired market liquidity. Since then, we have seen some reversal,

though we believe this is simply reflective of greater comfort with liquidity.

We do not exp. a strong structural bid for Tsys from this category given the

alternatives (e.g. MBS), US$ strength (which means fewer reserve increasing

interventions) & weaker energy prices (which translates into oil producers

dipping into rather than adding to reserves). For the foreign private sector,

while FX hedging costs have declined, we exp. foreign investors may prefer US

credit given the low yield-pickup of Tsys. For the unhedged foreign investor,

low yields & currency vol mean these flows are unlikely to be large. While we

exp. the combined foreign off'l & private sector bid to be the 3rd-largest Tsy

buyer category outside of the Fed from 2Q-4Q20, most of this will be reversing

sales seen in Mar. On net, we think both these categories are likely to end the

year as modest net sellers of Tsys. Foreign investors have been net sellers only

on 3 occasions in the last 2 decades - '16 was last time this occurred."