The U.S. bond market is murky these days.
Yields have been plummeting. But some of the action is almost certainly due to the Federal Reserve once again buying Treasuries. Since August 19, the Fed has bought $40 billion in government bonds.
But the Fed has no influence over foreign buyers of U.S. Treasuries. And these purchasers have been coming on strong.
Data last week showed that foreigners bought $117 billion in net Treasuries during August. This is the second-highest monthly total of all-time. Just a hair under the record $118 billion purchased by foreigners in November 2009.
Foreign buying of U.S. government debt has been in an uptrend since early 2009. Apparently the death of the dollar isn't so convincing abroad.
By Dave Forest of Notela Advisors