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Foreign investors pour $102 billion into U.S. assets

July 17, 2012: 11:44 AM ET

Global demand for U.S. assets remained strong in May, according to the Treasury Department's latest report on foreign holdings.

Foreign purchases of U.S. assets surged to $101.7 billion in May, compared with net sales of $8.2 billion in April, according to the Treasury International Capital (TIC) report. Private investors bought a total of $60.3 billion, while public institutions purchased $41.4 billion of U.S.assets.

TIC data measure the flow of funds into and out of  U.S. securities, such as Treasuries, agency-backed securities, corporate debt and stocks, as well as banking capital flows.

Foreign investors bought a total of $45.9 billion of U.S. Treasury bonds and notes in May, compared with net purchases of $38.7 billion in April.

Demand for U.S. Treasury securities has been robust, with public and private investors outside the United States buying a net $464 billion over the last 12 months.

"Despite the downgrade of U.S.sovereign debt last August and little subsequent progress on deficit reduction, foreigners remain enamored with U.S. Treasury debt," analysts at Wells Fargo wrote in a note to clients. "Apparently, America's fiscal problems do not look so bad when compared to the situation in Europe, which has festered for more than two years."

Related: Negative bond yields in Europe

Overall, China, the U.S. government's top creditor, remains the largest holder of U.S. Treasury securities. In May, Mainland Chinese investors increased their holdings by $5.2 billion to $1.17 trillion.

The yield on the 10-year U.S. Treasury note slid to a record low of 1.44% Monday, as ongoing signs of weak global growth kept the flight to safety alive and well. Investors tend to snap up Treasuries during times of uncertainty because they're backed by the U.S. government.

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Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news.

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