The FOMC assembly minutes will not be the one standout occasion on the financial calendar at present. That is one which may even be closely watched by merchants and buyers, that particularly for the reason that US greenback has been closely scrutinised in current months. For all of the speak about de-dollarisation and market gamers promoting US belongings, it hasn’t fairly confirmed up on demand for Treasuries.
The earlier report for November 2025 confirmed that international investor holdings of Treasury securities hit a report $9.36 trillion. And that’s although China’s holdings dropped additional to ~$683 billion, its lowest since 2008.
It is no shock that Japan continues to high the listing with ~$1.20 trillion in holdings, with the UK in second with ~$888 billion in holdings.
That being mentioned, the essential element when trying into this report is to not take the numbers at face worth. It’s best to do not forget that the numbers listed below are solely a measure of every nation’s holdings of Treasuries in US custodians. The factor about that is that some international locations, or ought to I simply single out China on this case, are nonetheless shopping for Treasures by way of non-US custodians.
And that exhibits up within the numbers for the likes of Belgium and Luxembourg. As seen from the chart above, their holdings are going toe-to-toe with a number of the main gamers on this planet. And that’s largely as a result of they act as a custodial hub for different international holders.
So, that is one factor to pay attention to.
The opposite key factor is to concentrate on the continued shift in development by way of structural holdings of Treasuries and US debt. In different phrases, who is de facto driving the demand for Treasuries.
And on this occasion, it’s not central banks for probably the most half. As a substitute, personal buyers i.e. hedge funds, pension funds, asset managers at the moment are the dominant consumers. They’ve been for fairly some time now. Within the November report, personal shopping for amounted to ~$158 billion – greater than double the ~$64 billion by official establishments.
What does this imply precisely?
It exhibits that US funding is now changing into extra more and more depending on market-based capital and never a lot so on reserve recycling. To place issues extra merely, it is extra about yield and monetary demand slightly than being a case of a geopolitical function.
So regardless of all of the de-dollarisation rhetoric and backlash towards the US since final yr, Treasuries seem to stay structurally indispensable globally.
Nevertheless, it will be flawed to rapidly assume that Treasuries and the greenback system stays sturdy. Sure, it’s nonetheless holding up strongly however so is the shifting development to different markets.
As a reminder, gold’s share of world central financial institution reserves additionally surpassed that of Treasuries late final yr. And that’s the first such structural shift within the steadiness of holdings since 1996.
