NEW YORK (Dow Jones)–U.S. stocks marked their worst decline in about three months as a disappointing report on manufacturing early Thursday led to a broad sell-off for many of the companies that helped pace a surging third quarter in stocks, including JPMorgan, Caterpillar and American Express. – WSJ¹

With Dow 10K receding like a toy helium balloon and equity investors looking over their shoulders at what well may have been the most astounding Bear Rally in Wall Street history, you’d think that the debt markets would be flooded with refugees from the capital markets, but they didn’t include this gang, at least not this week. Foreign central banks’ holdings of net US obligations barely nudged up, less than a billion dollars. Even the the Fed’s own MBS holdings slipped a trivial $1.270 billion. This week’s Reuters report² provided yet another episode of "same same," with modest moves by Treasury and Agency Debt in opposing directions. The report was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.³ Here is Doom’s updated CSV version⁴ of the agencies and treasuries foreign central bank holdings data set.

The treasuries buy bounced back a bit to $8.365 billion, nearly doubling last week’s figure.

But agencies fell by a significant $7.462 billion, nearly canceling out the treasuries rise.

The net buy of US obligations was a tiny $0.903 billion. Gains in holdings of US debt have been quite lumpy lately.

Twist’s ratios graphs once again trended down.

Both elements of Setser’s 52-week change graph come down and there’s some convergence on the treasuries line dipping a lot. It’s been one year since the the largest treasuries buy ever (in the wake of the the monumental events of late September ’08).

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Notes and References

[1]: "US Stocks Mark Biggest Decline In Roughly Three Months", by Geoffrey Rogow, Wall Street Journal, October 1, 2009.

[2]: "Foreign central banks’ U.S. debt holdings rise-Fed", by Ellen Freilich, Reuters, October 1, 2009.

[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.

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