International Demand for U.S. Assets Rises

International demand for U.S. financial assets rose in March as investors continued to seek safety from the debt crisis in Europe. Net buying of long-term equities, notes and bonds totaled $36.2 billion during the month, compared with net purchases of $10.1 billion in February, the Treasury Department said today in Washington. Economists surveyed by Bloomberg News projected net buying of $32.5 billion of long-term assets, according to the median estimate. Investors are buying “U.S equities as U.S. stocks performed well in March,” Kevin Chau, a foreign exchange strategist at IDEAglobal in New York, said before the report. “The European debt problem will hang over our heads until the European Union comes up with a comprehensive bailout for all highly indebted countries.” U.S. assets maintained their attraction as the European debt crisis mounted on concerns that Greece may leave the euro area. Greece’s impasse over forming a government has raised the possibility of another vote to be held as early as next month, threatening the implementation of austerity pledges under the international financial rescue plan. Estimates of foreign purchases of long-term assets in March ranged from net buying of $25 billion to $75 billion, according to four economists surveyed before the report. China remained the biggest foreign owner of U.S. Treasuries in March after its holdings rose $14.7 billion to $1.17 trillion, according to the Treasury. Including short-term securities such as stock swaps, foreigners sold a net $49.9 billion in March, compared with net buying of $92.6 billion the previous month. The Treasury Department’s data capture international purchases of government notes and bonds, stocks, corporate debt and securities issued by U.S. agencies. The Treasury said in February it was shifting from a transaction-based survey to a custodial survey to keep track of foreigners’ holdings. As a result, month-to-month comparisons are not comparable.