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And in April, their purchases of long-term securities at Treasury auctions increased.
By Wolf Richter for WOLF STREET.
Buying US Treasury securities was all the rage among foreign investors in March, despite whatever turmoil there was in the media. All foreign investors combined, from central banks to private investors, increased their holdings of Treasury securities by $233 billion in March from February, and by $942 billion over the past 12 months, to a record $9.05 trillion (red in the chart).
The majority of what they bought were long-term Treasury securities, which increased by $133 billion to a record $7.63 trillion, according to data by the Treasury Department Friday afternoon (blue in the chart).
The buying was across the major holders, except for China and Hong Kong combined, and for Ireland. Of particular note: Canada’s holdings of Treasury securities spiked majestically in February and March, despite the tariffs and the ultra-sour mood in Canada about US-anything.
Over the years, foreign holdings have increased in dollar amounts as the above chart shows, but the US debt has ballooned even faster than foreign investors have added to their holdings, and so their share has declined over the years, while US domestic buyers stepped in and loaded up. The low-point of the share of foreign holdings was in October 2023, when it dropped to 22.2% of total US Treasury securities. Then the share of foreign holdings increased again.
Since the beginning of 2025, the US debt has been at the debt ceiling of $36.2 trillion, and cannot increase until Congress lifts the debt ceiling. So as foreign holders continued to add to their holdings, their share of the debt-ceiling-limited debt shot up in March to 25.0%.
When the debt ceiling is lifted, and the US adds maybe close to $1 trillion to its debt in just a few months, the foreign share of that ballooning total will decline again.
Auction purchases by foreign investors through April.
Foreign investors can purchase Treasury securities in the market and at US Treasury auctions. The Treasury department publishes the amounts of auction purchases by foreign investors twice a month. The most recent Treasury Auction Allotment Report on May 7, which covers all auctions through April 30, shows that foreign investors purchased $36 billion in notes and bonds (“coupons”), for a share of 9.7% of the $370 billion in notes and bonds sold to the entire market (Fed purchases excluded).
Both the dollar amount and the 9.7% share were higher than in March. And the rumors raging in April, spread by the anti-tariff clickbait crowd, that foreigners were boycotting the Treasury auctions to punish the US government for the tariffs, were shot down by reality.
But we can see the longer-term trend that buying by foreign investors has not been keeping up with the ballooning auction sizes needed to fund the ballooning deficits.
As domestic buyers have to pick up a greater share, higher yields may be needed to make the securities attractive enough to pull in an ever-larger body of domestic buyers.
Euro Area v. China + Hong Kong.
China and Hong Kong combined shed $30 billion of their holdings in March, reducing their holdings to $1.03 trillion. But over the past 12 months, they still increased their holdings by $53 billion. Since the 2015 peak, they’ve shed about one-third of their holdings (blue in the chart below).
The Euro Area added $24 billion in March and $271 billion over the past 12 months, bringing its holdings to $1.86 trillion (red in the chart below).
The biggest holders within the Euro Area are the financial centers (Luxembourg, Ireland, Belgium, see further below) and France, whose banking system also functions as a global financial center. Their combined holdings rose to $1.51 trillion, accounting for 81% of the Euro Area’s total holdings.
Japan’s holdings edged up by $5 billion in March, after the big jump in February. Since 2012, Japan’s Treasury holdings rose and fell and rose, but in March at $1.13 trillion, were back where they had been in 2012:
The six largest financial centers are rocking and rolling: They added $85 billion in Treasury securities in March (+3.3%!), and $332 billion over the past 12 months, to a record $2.69 trillion. Since 2019, their holdings have nearly doubled. Since 2012, their holdings have nearly quadrupled!
These countries specialize in handling the financial holdings of global companies, individuals, and governments. Ireland is a favorite for US Big Pharma and Big Tech to store their profits. Belgium is home to Euroclear, which has $40 trillion in assets under custody for companies, governments, and wealthy individuals, and a sliver of that is in US Treasuries. The United Kingdom here means the “City of London,” one of the top financial centers in the world.
So a portion of the holdings at these financial centers are actually held by US entities.
Ireland was the only one of the six financial centers to book a month-to-month decline. Luxembourg’s holdings were essentially unchanged (+$12 million).
Increases in March, and total Treasury holdings:
- United Kingdom: +$29 billion, to $779 billion
- Luxembourg: unchanged, at $412 billion
- Cayman Islands: +$37 billion to $455 billion
- Ireland: -10 billion to $329 billion
- Belgium: +$7 billion to $402 billion
- Switzerland: +$21 billion to $312 billion.
The United Kingdom added $29 billion in March and $43 billion over the past 12 months, bringing its holdings to $779 billion. The UK is also included in the list above of the top 6 financial centers, but it’s by far the biggest and deserves its own chart:
Canada’s holdings spiked by $20 billion in March after the $55 billion spike in February, to $426 billion. Since March 2021, holdings have quadrupled! Since 2012, holdings have octupled!
France’s holdings rose by $9 billion in March, and by $91 billion from a year ago, to $363 billion.
Taiwan’s holdings rose by $3 billion in March and by $37 billion year-over-year to a record $298 billion:
India’s holdings jumped by $12 billion in March, the third month of increases, after three months of declines, bringing its holdings back to $240 billion, roughly unchanged year-over-year. The high was in September at $247 billion. Since 2012, its holdings have sextupled:
Brazil increased its holdings by $1 billion in March, to $208 billion, the second month of increases, after a series of declines. Since the peak in 2018, its holdings have fallen by 36%:
In case you missed it: How the Debt Ceiling Is Now Pouring Liquidity into Financial Markets, only to Suck it Back Out Very Fast Later this Year
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The post Foreign Investors Loaded Up on Treasury Securities in March Despite all the Turmoil in the Media appeared first on Energy News Beat.
