Safe Haven – Net foreign capital flows into the US slipped 1.4% to $89.1 bln billion in November from a revised $104.2 billion in October (initial was $106.8 bln). Although the $107 billioncomfortably exceeded the $64 billion record trade deficit for the corresponding month.
KEY POINT: Despite the 41% and 74% declines in net foreign purchases of US stocks and US Agency securities respectively, and despite the 176% increase in net US purchases of foreign stocks, total net capital inflows increased because private institutions’ purchases of US treasury bonds and notes DOUBLED to $50.8 bln, making up 93% of the increase in total purchase of US Treasuries and financing up to 79% of the Nov trade deficit.
