Are foreign investors regretting their decision?

  • Foreign investors sold $1.7 billion in Treasurys on a net basis in September, marking the first time they were net sellers in over two years
  • David Rosenberg, a prominent Wall Street economist, believes foreign sellers may regret their decision as a short squeeze in Treasurys is expected to continue
  • Foreign ownership of Treasurys has decreased to around 30%, down from over 40% a decade ago
  • Flows reported by the Treasury only capture trades using U.S.-based custodians, making it difficult to gauge the exact degree of foreign buyer activity

Foreign investors sold $1.7 billion in U.S. Treasury debt in September, marking the first net outflow since May 2021. This comes at a time when a short squeeze in Treasurys is expected to continue, potentially causing foreign sellers to regret their decision. Foreign ownership of Treasurys has been declining over the years, and it is difficult to accurately measure the extent of foreign buyer activity due to reporting limitations. Despite selling Treasury bonds, foreign entities continued to buy agency bonds in September. Treasury yields have also fallen significantly since reaching a 16-year high last month.

Factuality Level: 7
Factuality Justification: The article provides information on the selling of U.S. Treasury debt by foreign investors in September, as well as the opinion of a Wall Street economist. The information is based on the Treasury Department’s monthly reports and quotes from David Rosenberg. However, the article lacks in-depth analysis and fails to provide a balanced perspective on the topic.
Noise Level: 7
Noise Justification: The article provides some relevant information about foreign investors selling U.S. Treasury debt and the potential consequences of their decision. However, it lacks in-depth analysis and evidence to support the claims made by the Wall Street economist. The article also includes some unrelated information about foreign ownership of Treasurys and the buying of agency bonds, which distracts from the main topic. Overall, the article contains some noise and lacks scientific rigor.
Financial Relevance: Yes
Financial Markets Impacted: Foreign investors selling U.S. Treasury debt may impact the bond market and potentially influence Treasury yields.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses foreign investors selling U.S. Treasury debt, which can have implications for the bond market and Treasury yields. However, there is no mention of any extreme events or their impact.
Private Companies: Rosenberg Research,Merrill Lynch,Pershing Square Capital Management
Key People: David Rosenberg (Founder of Rosenberg Research and former Merrill Lynch economist), Bill Ackman (Founder of Pershing Square Capital Management)

Reported publicly: www.marketwatch.com