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ING warns Treasury yields face continued pressure as foreign holdings fall

Foreign holdings of US Treasuries dropped to $9.299 trillion in June, while the US 30-year yield rose to 5.321%, ING said the heavy tone has more room to run.

Reported · Written up by our desk · Central Banks

Foreign holdings of US Treasuries fell in June, led by declines from Japan, the UK, and China, according to Treasury Department data cited by Forexlive. Total foreign holdings slipped to $9.299 trillion from $9.371 trillion in May, though they remained up 2.3% from a year earlier.

Forexlive, citing ING, said the Treasury market’s heavier tone likely has further to run, pointing to a $72 billion net liquidation on a TIC-based read by foreign holders. ING also tied the outlook to fading de-escalation rhetoric around Iran, after a 60-day truce lapsed without resolution, and to ongoing issuance pressure.

ING further noted that eurozone liquidity conditions are tightening gradually, citing shrinking excess reserves and wider ESTR-deposit spreads. The firm highlighted early 2027 as a rough window when banks may need to overcome reluctance to tap ECB operations, a dynamic it said matters for Bund spreads.

On rates, the US 30-year yield rose to 5.321%, its highest level since the middle of 2007, Forexlive reported. ING’s view, as summarized by the outlet, was that real yields normalizing is not necessarily a warning sign, but continued issuance pressure and renewed Iran risk could keep yields and energy prices supported at the margin.

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