US net long-term TIC flows totalled $58.6bn in February. This was above expectations of $36.6bn.
The data relates to long-term cross-border capital flows tracked by the United States. It reports a $22.0bn difference versus the expected figure.
We are seeing a significant signal of foreign confidence in U.S. assets from the February data. This strong inflow helps explain why the U.S. Dollar Index (DXY) has been so resilient, recently pushing above the 105 level. We should therefore consider positioning for continued dollar strength against currencies like the euro and yen in the coming weeks.
This demand for long-term debt should put a ceiling on Treasury yields for now. With the latest March CPI data showing inflation moderating to 2.8%, betting on lower rates has become more compelling. Derivative trades that profit from stable or rising bond prices, like call options on long-term bond ETFs, look attractive.
For equities, these capital flows act as a strong support level, cushioning the market against major declines. We believe selling out-of-the-money put options on the S&P 500 is a viable strategy to collect premium. This is reminiscent of the market action in the fourth quarter of 2025, when similar inflows helped absorb selling pressure and stabilize the index.
This steady buying pressure from abroad is also likely to suppress market volatility in the near term. With the VIX already trending down near 14, we see opportunities in short-volatility trades. This environment supports strategies that benefit from a stable or slowly rising market.
