NDR:  Foreign Investors Return Strongly to U.S. Securities in May

After stepping back in April, foreign investors returned to U.S. markets in force in May, with net purchases of long-term U.S. securities hitting a record $318.5 billion (chart above). Bond buying led the surge, reaching a record $204.3 billion, while equity purchases totaled $114.3 billion which was the fourth highest on record. Treasury securities saw the second-largest inflow on record at $146.3 billion, with 79% of that coming from the private sector. Purchases of agency and corporate bonds also rebounded, though they didn’t reach record highs. The buying was widespread across regions, with even China purchasing $12.4 billion.

Meanwhile, U.S. investors returned to foreign markets, buying a net $59.1 billion in overseas securities that mostly consisted of equities. After offsetting U.S. outflows, the net foreign inflow stood at $259.4 billion, with $195.9 billion in bonds and $63.5 billion in stocks. Bank liabilities rose by $41.1 billion, and short-term securities purchases added $10.3 billion. Total net international capital flows reached $311.1 billion, the third highest on record.

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