NEW YORK (Reuters) - Chinese investments in US Treasuries in April fell to its lowest level since May 2017, Treasury data showed the US on Monday, underlining the uncertain outlook for trade deal between Beijing and Washington.
China's investments in US government debt fell for the second month in a row to $ 1.113 trillion in April, down from $ 1.120 trillion the previous month. Despite this, the second largest economy in the world remains the largest holder of Treasuries outside the United States.
According to analysts, the investment in Belgium, where China usually holds some of its assets, also fell to $ 179.8 billion in April, compared with $ 186.6 billion in March.
"This is a problem, given that the Chinese reserves during the month decreased by a little less than $ 4 billion," - said Gennadiy Goldberg, senior analyst at the rates in TD Securities in New York. "So that the bond sales is much more than one would expect."
"If you look at the flow of funds, for example, in the first quarter was marked buying Treasuries. So it certainly suggests that foreigners get more profit by investing in bonds, "- Goldberg said, although he does not believe that the decline was due to the trade conflict.
"If it was due to the trade, you would have seen a greater pressure on the Chinese yuan, or you would have seen a reduction in foreign exchange reserves in the ratio one to one", - said Goldberg.
The data showed that Japan, the second largest holder of Treasury bonds outside the US also reduced its investments in April to $ 1.078 trillion to $ 1.064 trillion in the previous month.
In general, foreign investment in US Treasury bonds fell to $ 6,433 trillion in April, compared with $ 6,473 trillion in March.
Meanwhile, the inflow of foreign currency in US Treasury bonds in April was $ 16,949 billion compared with net sales of $ 12,526 billion in March. Offshore private investors have invested in Treasury bonds $ 45,366 billion during the month compared to $ 91 million previously.
Foreigners sold US stocks in April for $ 964 million after the outflow of $ 23,638 billion in March. Foreign investors sold shares of 12 consecutive months.
The report showed that in April, foreigners bought long-term securities in the amount of $ 46.9 billion in March after selling $ 25.9 billion.