Flat. Sort of like Mark Squidly’s loonie which finished yesterday at an amero-friendly $1.0000, with the buck basically hovering between C$1.00 and C$1.03 for over three months now. Talk about bedroom eyes; but I digress … So the Fed’s own holdings of MBS dropped once again by a material $16.259 billion that took the total figure south of $1 trillion for the first time since mid-February, while today’s modest moves brought the cenbanks’ treasuries number close to the figure from six weeks ago, the agencies one to that from eleven. Like at the end of ’09, somebody will have to goose renewed foreign demand for this stuff very soon or an obvious top will have formed while nobody was paying much attention.
This week’s Reuters report1 was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.2 Here is Doom’s updated CSV version3 of the agencies and treasuries foreign central bank holdings data set.
The treasuries number reversed course and gave back a good chunk of last week’s growth.
The Treasury Debt number shrank by a large $7.134 billion taking back over half of last week’s gain.
Agencies gained again, but by only $0.843 billion
*Agen-FM: The dotted line is the foreign central banks’ Agency Debt holdings reduced by the level of the Fed’s own MBS holdings. Since the FRBNY itself is a lightly audited peculiar amalgam of foreign & domestic, central and private bank I think it might be useful to consider the hypothesis that for a while starting in January 2009 the Fed’s MBS holdings were being quietly deemed to be “foreign.” That is, for the first half of ’09 the dotted line seems more sensible than the red one.
The net of US obligations held shrunk by $6.291 billion, but that reversed only about a third of last week’s healthy gain.
Twist’s ratio graphs ticked up this week.
The Setzer graph agencies number was flat but the treasuries number lost ground a bit.
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Notes and References
[1]: “Foreign central banks’ US debt holdings fall – Fed”, Reuters, December 30, 2010.
[2]: “H.4.1 Factors Affecting Reserve Balances”, Federal Reserve Statistical Release (weekly), Federal Reserve Bank of New York.
[3]: The updated data set as a Comma Separated Value (CSV) file is here (includes Fed’s own MBS holdings).
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