ticdata

The U.S. Treasury disclosed in its latest Treasury International Capital (TIC) report for August that net inflows of long-term capital into the United States reached $279.2 billion that month, a sharp reversal from the previous month’s net outflow of $27.9 billion. Overseas investors made net purchases of $109.9 billion in U.S. Treasuries in August, reversing the previous month’s net sales of $3.6 billion and pushing overall net international capital inflows for the month up to $199.8 billion.

These figures clearly show that, amid rising global uncertainty, capital around the world is accelerating its return to core U.S. dollar assets in search of shelter. Although markets have concerns about the United States’ massive fiscal deficit, overseas institutions continue to view high-yielding U.S. Treasuries as an irreplaceable ultimate safe haven in the face of geopolitical and macroeconomic volatility.

The large influx of capital into dollar assets is supporting Treasury yields in the short term while further reinforcing the resilience of the U.S. dollar index. However, from a macro liquidity perspective, the strong siphoning effect of global capital is tightening liquidity in offshore markets, placing an invisible liquidity constraint on risk assets overall.

For the cryptocurrency market, a major buildup of funds in traditional sovereign debt is not an encouraging sign. With risk aversion in the driver’s seat and risk-free yields remaining elevated, digital assets such as $BTC may struggle to attract ample new fiat inflows in the short term. Investors should remain cautious about the risk of a pullback resulting from further liquidity tightening. 📊

#TICData #CapitalFlows #MacroEconomy