The number of US Treasuries held by foreign investors was near record highs in April, even as US President Donald Trump’s Liberation Day tariffs triggered one of the steepest sell-offs in the asset class in over two decades, Bloomberg reports. Foreign holdings came in at USD 9.01 tn — just shy of March’s all-time high following sales of US bonds and notes, according to US Treasury data. This came despite concerns over a wave of outflows from American debt and equity markets following the tariff announcements.

IN CONTEXT- Trump’s tariff announcement in early April triggered a historic sell-off, with Treasuries posting their worst weekly performance in over 20 years. A weak 20-year bond auction in May added to the sell-off, though 30-year and 20-year offerings later saw better take-up.

But no mass exit: Despite this, buyers were ramping up holdings of long-term Treasuries, with official institutions being net buyers. Foreign investors were net sellers of US agency bonds and equities, but increased their exposure to long-term corporate debt, suggesting selective rebalancing rather than a broad retreat.  

Big buyers didn’t blink: Japan, still the top holder, increased its holdings by USD 3.7 bn to USD 1.13 tn. The UK added USD 28.4 bn, overtaking China for the number-two spot with USD 807.7 bn. Belgium — often seen as a proxy for Chinese custodial accounts — rose USD 8.9 bn to USD 411 bn.

China pulled back, Canada dumped: China’s holdings dropped by USD 8.2 bn to USD 757 bn, continuing a multi-year retreat. Canada posted the largest decline, offloading nearly USD 58 bn to bring its total to USD 368.4 bn. The Cayman Islands — a hub for hedge funds — also reduced holdings by USD 7 bn.

“The ‘Sell America’ narrative is an over-exaggeration,” Morgan Stanley’s Vishal Khanduja told Bloomberg elsewhere, though warning of “slow and bumpy [USD] depreciation” ahead. Jamie Patton of TCW Group also pushed back on talk of capital flight, saying there’s a “big difference between valuation and the reserve status of the USD or Treasuries as a de facto safe asset.”

Concerns that US Treasuries “safe haven status” is in jeopardy still abound, with the latest red flag being the lack of a rally during the Israel-Iran flare-up — which would typically be a haven bid moment.

MARKETS THIS MORNING-

Asian markets are mixed once again, with China’s CSI 300 trading flat following the People’s Bank of China’s decision to hold interest rates steady, while Japan’s Nikkei lost 0.1% after inflation figures from May showed consumer prices rising to their highest level since 2023. South Korea’s Kospi gained 0.65%. Wall Street futures are down after stocks paused trading yesterday for the Juneteenth holiday.

ADX

9,423

-0.8% (YTD: +0.0%)

DFM

5,270

-0.7%(YTD: +2.1%)

Nasdaq Dubai UAE20

4,254

-1.3% (YTD: +2.2%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.2% o/n

4.3% 1 yr

TASI

10,611

+0.2% (YTD: -12.0%)

EGX30

30,248

-1.9% (YTD: +1.7%)

S&P 500

5,981

-0.0% (YTD: +1.7%)

FTSE 100

8,792

-0.6% (YTD: +7.6%)

Euro Stoxx 50

5,197

-1.3% (YTD: +6.2%)

Brent crude

USD 77.22

-2.1%

Natural gas (Nymex)

USD 4.09

+2.6%

Gold

USD 3,382.50

-0.8%

BTC

USD 104,316.94

-0.4% (YTD: +10.4%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.56

0.0% (YTD: -0.2%)

VIX (Volatility Index)

22.17

+10.1% (YTD: +27.8%)

THE CLOSING BELL-

The DFM fell 0.7% yesterday on turnover of AED 684.4 mn. The index is up 2.1% YTD.

In the green: International Financial Advisors (+14.1%), Taaleem Holdings (+5.6%) and Ekttitab Holding Company (+3.4%).

In the red: National General Ins. Company (-10.0%), Dubai Refreshment Company (-9.8%) and Al Mazaya Holding Company (-9.8%).

Over on the ADX, the index fell 0.8% on turnover of AED 1.3 bn. Meanwhile, Nasdaq Dubai was down 1.3%.

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