Global Market: Foreign investors add $132 billion to US securities in May as equity demand stays strong

Foreign investors purchased a net $132 billion worth of U.S. securities in May, underscoring continued global appetite for American financial assets despite heightened focus on inflation and the outlook for U.S. interest rates, according to data released by the U.S. Treasury Department, Reuters reported.

According to Reuters, the Treasury's monthly Treasury International Capital (TIC) report showed that net long-term purchases by foreign investors reached $1.33 trillion over the 12 months through May, reflecting sustained overseas demand for U.S. assets.

Foreign investors were particularly active in the equity market, buying a net $134 billion worth of U.S. stocks during May. The strong monthly inflow lifted net foreign purchases of U.S. equities over the past year to $909 billion, supported by the ongoing rally in U.S. stock markets.


The report also showed a decline in foreign holdings of short-term U.S. government debt. Overseas investors reduced their holdings of U.S. Treasury bills by $43.5 billion during the month, a move likely to attract attention as investors assess inflation trends and the potential path of Federal Reserve interest-rate policy.

Demand for longer-dated U.S. government securities remained positive. Net foreign purchases of longer-term Treasury securities totaled $56.6 billion in May, taking cumulative purchases over the past 12 months to $290 billion, the Treasury data showed.

Foreign investors also continued to increase their exposure to U.S. corporate debt. Net purchases of corporate bonds stood at $52.5 billion during May, while cumulative purchases over the past year reached $449 billion, according to the Treasury Department.

The latest TIC data highlights continued international confidence in U.S. financial markets, with strong inflows into equities and corporate bonds helping offset reduced demand for short-term government securities amid evolving expectations for U.S. monetary policy, Reuters said in the report.