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VT 
In March, the United States net long-term Treasury International Capital (TIC) flows recorded $161.8 billion, surpassing the anticipated figure of $44.2 billion. This data indicates a substantial increase compared to projections.
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The latest TIC data from March outlines one of the largest monthly surges in net long-term Treasury purchases by foreign entities in recent memory, coming in at $161.8 billion versus an expected $44.2 billion. Such an outcome not only exceeded forecasts but more than tripled the median estimate, suggesting an unexpected appetite for long-dated US government debt at a time when rate expectations remain uncertain.
To break this down, this category of flows reflects the difference between foreign purchases and sales of US long-term securities, such as Treasuries. A positive figure means more buying than selling. It’s a metric that puts attention on international demand for dollar-denominated safe assets—and, importantly, acts as a window into confidence in the US economy as well as views on future interest rates. March’s number, especially given its magnitude, implies foreign institutions increased their exposure to longer-duration US bonds even with the yield curve still mildly inverted.
What stands out isn’t simply the size of the buying, but its timing. The Federal Reserve had by that point paused rate hikes, inflation data came in mixed, and two-year yields were drifting lower. Thus, the material upswing in foreign purchases could point to an early repositioning ahead of a potential policy shift. It also aligns, to some extent, with what the US rate futures markets were pricing in at the time—namely, the start of a cutting cycle perhaps sooner than later. That suggests a degree of alignment between global fixed income participants and forward-looking rate expectations embedded in short-term trading products.
Yields came under notable downward pressure in March, especially towards the long-end of the curve. Those purchasing Treasuries at this point may well have been positioning themselves for capital gains on pricing, not merely coupon clipping. That said, the duration risk increases if rate policy remains higher for longer, which makes the scale of such positions noteworthy considering the volatility in communication from central banks.
Foreign Bid In Treasury Markets
From where we stand, the data is making it harder to ignore the large foreign bid reasserting itself in a space that had been relatively muted in previous months. Though this is just one point in a longer time series, patterns have a way of inviting follow-through if market participants sense forward momentum building.
Derivative desk activity may need to adjust in kind. When flows of this nature gather strength, especially from overseas accounts perceived to be sensitive to currency risk or interest rate differentials, it tends to ripple into wagers on future rate moves, options positioning on Treasuries and even plays tied to FX volatility structures. Risk premia that had expanded during times of uncertainty may begin to contract as international buyers soak up supply and compress spreads.
What we may now consider is whether this move marks a trend shift or merely a one-month anomaly. The scale implies intent. Not scattershot buying, but rather, a coordinated or at least highly consensual increase in exposure. That makes higher-frequency metrics, such as weekly Federal Reserve custody flows, more relevant in the short term. If those start to reflect continued strength, early adjustments in futures positioning could be in order.
As it stands, it’s worth noting that forward interest rate volatility remains elevated but less so than before. That environment incentivises carry trades and longer-term exposures, as long as funding conditions don’t tighten unexpectedly.
Positioning, especially in rate-sensitive derivatives, may need to factor in sustained demand for duration—and potentially some hedging activity from foreign holders who have ramped up exposure. Swaption skews, gamma around front-end pricing, and curve steepening plays may all bear watching.
Taking all into account, accuracy in assessing momentum of flows and their transmission across dollar assets could create an edge in forecasting pricing behaviour during key auction windows and economic prints. We’ll be keeping a sharp eye on how much of this becomes self-reinforcing.
