Global demand for U.S. assets, including stocks, bonds, and other types of financial assets rose to open the second quarter as China increased holdings for the first time this year, according to Bloomberg. On Wednesday, the Treasury Department reported that net buying of long-term equities, notes and bonds reached $30.6 billion April, which is about 25% higher than the $24 billion recorded during March. Including short-term securities, purchases were up $68.2 billion in the latest month, which was far less than the $127.1 billion seen during March.
The data showed that China increased its holdings by $7.6 billion in April to $1.2 trillion, and Chris Rupkey of Bank of Tokyo-Mistubishi pointed out, “With the huge trade surplus China enjoys with the U.S., they can only delay purchases of Treasuries for so long.” The monthly increase in long-term asset purchases was less than the $35 billion projected by economists, reflecting continued concern abroad about the strength of the U.S. recovery as unemployment remains high and the federal debt ceiling attracts more attention. Total purchases of Treasuries were down to $23.3 billion in April from $26.8 billion previously, while net foreign purchases of equities were up to $17.8 billion from $14.7 billion the prior month.