October Was The 2nd Biggest Month Of Foreign Selling Of US Stocks Ever, Officials Dump TSYs As Gold Reserves Soar

For the second month in a row, total foreign net long-term portfolio securities inflows to the US were tiny (just $3.3BN)...

Source: Bloomberg

October was an ugly month for US equities (only to be followed by two months of staggering gains)...

Source: Bloomberg

...and now we have a good idea who was behind that selling. The latest TIC dats shows October saw the second biggest month of foreign selling of US stocks ever...

While both private and official entities were sellers of stocks in October, Foreign Official entities were net sellers of US Treasuries...

Source: Bloomberg

...but Private entities were buyers of Treasuries...

Source: Bloomberg

Belgium and Luxembourg were the biggest sellers of US Treasuries (-$31.6BN and -$28.2BN respectively) and China was also a seller (-$8.5BN)

Combining China and Belgium's data (since Beijing is using Euroclear as custodian for many of its TSY holdings), we see that "China" sold over $40BN in TSYs in October - its second biggest-selling month since Nov 2016...

Source: Bloomberg

Finally, we continue to broadly see the trend of de-dollarization with gold holdings on the rise as UST holdings slide lower...

Source: Bloomberg

It really began gathering pace in 2019...

Source: Bloomberg

...and if Powell pivots as promised, we suspect that will continue.