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Highlights
Net inflow of long-term securities rose a respectable $55.0 billion in May, up from April's revised $27.2 billion. Foreign official institutions were heavy buyers of US securities in the month though foreign private accounts were also buyers. Buying was centered, where it usually is, in Treasuries where China and Japan -- by far the two largest holders of US Treasuries -- both increased their holdings. Foreigners were also buyers in the month of agency securities but were sellers of corporate & other bonds and were only slight net buyers of US equities. Note that inflow of foreign investment is key for the nation, helping to offset the twin deficits -- the budget gap, which is running at roughly $100 billion per month, and the monthly trade gap which is at about $50 billion.
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