Message-ID: <14774269.1075841375112.JavaMail.evans@thyme> Date: Tue, 12 Feb 2002 05:42:49 -0800 (PST) From: chet_fenner@bmc.com To: joe.parks@enron.com Subject: Flows Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Fenner, Chet X-To: Parks, Joe X-cc: X-bcc: X-Folder: \ExMerge - Parks, Joe\Deleted Items X-Origin: PARKS-J X-FileName: joe parks 6-26-02.pst In some of this morning's analysis w/r/t our discussion yesterday... * The net EUR/$ equity flow is Euro supportive currently mainly due to US buying in Euroland, the same is happening with US investors buying Japan. Net government bond flows are also US$ bearish both with Euroland and with Japan, the latter due to strong signs of Japanese repatriation still. * All this backs up what seemed a peculiar weakening of the US$ yesterday. For the remainder of the year the big question for the Dollar is will foreigners want to add to their holdings of US assets when they already hold 11% of the US equity market, 21% of corporate bonds and 36% of the Treasury market? * We know that the there is likely to be net FDI outflow from the US in 2003, with our pipelines suggesting a net US$46.2bn pending outflow currently the worst it has been for many years. It is noteworthy that FDI has funded around a third of the US current account deficits over the last 3 years, as important as, net equity inflow.