Maybe a global rate tweaking cycle instead?/TIC data/Earnings comments/Japan CPI

Maybe we're on the cusp of a global (outside of Japan) rate tweaking cycle instead of a rate cutting cycle? Post the ECB meeting where right after it ended and when all the leaks from the meeting flow out, Bloomberg News reported that "ECB policymakers are increasingly wondering if they may only be able to cut interest rates once more this year, according to people familiar with the matter. With inflation pressures still lingering, officials are becoming less confident that a path for two further reductions is realistic, and don't want investors to assume that a move in September is a done deal, said the people, who declined to be identified because deliberations are private."

That said, the swaps market is currently fully pricing in two more rate cuts and members Villeroy and Simkus today said they agreed with that assumption. Bonds yields are little changed for a 2nd day and same with the euro so nothing really market moving from the ECB meeting. 

While foreigners bought a net $46b of US notes and bonds in May according to last night's TIC data, it seems that Japan might have sold some Treasuries in order to fund their FX intervention. After selling a net $37.5b in April, they sold another $22b in Japan, taking their total holdings to $1.1 trillion, still the number one spot but that is the least since November. China sold $2.4b worth of Treasuries and their holdings are hovering around the lowest since 2009 and not a coincidence that the holdings really went south soon after Russian invaded Ukraine and the EU and US froze half of Russia's central bank reserves.  

Purchases coming from the Cayman Islands led the buying, $17.1b worth, and are typically hedge funds domiciled there. Canada added $16.3b and the UK $13.1b. The UK can be anyone, including banks, hedge funds and countries using a UK bank to transact. 

Bottom line, while 'foreigners' in totality continue to purchase US Treasuries, the % ownership of them continues to fall. They own about 30% of US marketable debt vs 50% 10 years ago (see page 2 which is page 5 of report, https://sgp.fas.org/crs/misc/RS22331.pdf). As part of this, the % of foreign reserves that hold US dollars as of March sits at the lowest level since 1996 with gold picking up some of that slack.