Foreign purchases of U.S. equities rose in March, a sign that foreign investors may be willing to take on a bit more risk. Another indication of receding risk aversion was the reduction in net purchases by foreign investors of U.S. Treasury bills in March.
Net Purchases of U.S. Securities Strongest in Six Months
• Net purchases of long-term U.S. securities totaled $55.8 billion in March, the highest outturn in six months. Not only did foreign central banks continue to buy Treasury securities, but private investors bought $30 billion worth of U.S. securities.
• Foreign investors showed some interest in riskier U.S. assets by purchasing $12.4 billion worth of U.S. equities in March.
U.S. Investors Willing to Invest Abroad Again?
• American investors dumped foreign securities late last year as capital markets locked up. It appears that trend may be coming to an end.
• Another indicator of receding risk aversion was the reduction in net purchases by foreign investors of U.S. Treasury bills, the safest financial assets on the planet.