Wednesday, April 17, 2024

TIC (Treasury International Capital)

Treasury International Capital (TIC) data is an economic indicator tracking U.S. cross-border investment.

The data provides insight into foreign investor interest in U.S. securities, which could have significant implications for the country’s financial markets and the U.S. dollar.

What is TIC data?

TIC data capture long-term and short-term U.S. securities transactions by foreign residents and foreign securities transactions by U.S. residents.

This data is collected on a monthly basis and is critical to understanding capital flows in and out of the United States.

By monitoring these flows, policymakers and investors can gain insight into the overall demand for U.S. assets and the health of the U.S. economy.

How to read TIC data

TIC report consists of two main parts: long-term securities transactions and short-term securities transactions. Long-term securities include U.S. Treasury securities, government agency bonds, corporate bonds, and stocks.

Short-term securities cover U.S. Treasury bills and other debt instruments with maturities of less than one year.

When reading the TIC report, the main concern is net foreign purchases of U.S. long-term securities, which is the difference between foreign purchases of U.S. securities and U.S. purchases of foreign securities.

  • A positive number indicates that foreign investors purchased more U.S. securities than U.S. investors purchased foreign securities, resulting in a net inflow of capital.
  • A negative number indicates a net outflow of capital.

Why is TIC data important?

TIC reporting is crucial and here’s why:

  1. It helps measure foreign demand for U.S. securities, which can affect interest rates and the value of the dollar.
  2. Sustained net capital inflows indicate confidence in the U.S. economy, while net capital outflows may indicate concerns about the U.S. economic outlook.
  3. These data can influence U.S. monetary policy because foreign investment in U.S. securities affects the money supply and credit conditions.

For these reasons, policymakers, investors, and analysts pay close attention to TIC data to assess the health of the U.S. economy and its potential impact on financial markets.

Who publishes TIC data?

The U.S. Department of the Treasury is responsible for preparing and publishing TIC reports.

The Treasury collects data from multiple sources including banks, securities brokers and other financial institutions to ensure the accuracy and comprehensiveness of reporting.

When will TIC data be released?

TIC data is released once a month, usually around the 15th of each month, with a lag of about 45 days from the reporting period.

The data is publicly available on the U.S. Department of the Treasury website and interested parties can access the data and analyze the results.

In addition, financial news outlets and market analysis platforms often cover TIC reports when they are released, providing insights and explanations of the report results.

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