Foreign central banks were net buyers of agency debt for the first time in nine weeks [1] [2] as they added a healthy $3.557 billion to their holdings. Meanwhile they bought a whopping $9.951 billion of treasuries. This news comes from FRBNY’s weekly statistical release H.4.1 [3] and Doom has again added the last week’s data to our CSV file going back to early 2000.[4]
Since the treasuries purchase was so strong, the agencies / treasuries ratio continued to decline slightly.
And therefore the trend reversal in the graph going back to 2000 is a bit more pronounced.
With this week’s tumultuous markets, it’s anyone’s guess where the trend will go next week.
Should central banks continue buying agencies after this week the downward tick in the following graph might yet prove to be an aberration.
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Notes and References
[1]: "Foreign central banks boost US agency holdings – Fed", Reuters, September 18, 2008.
[2]: "Foreign Central Banks Agency Holdings Up $3.557B In Wk To Wed", FXStreet, September 18, 2008.
[3]: "H.4.1 Factors Affecting Reserve Balances", Federal Reserve Statistical Release (weekly), Federal Reserve Bank of New York.
[4]: The updated data set as a Comma Separated Value (CSV) file is here.
