According to the most recent TIC data, reported here last week, foreign Treasury holders and especially China, were dumping US paper like there's no tomorrow. In fact, according to the latest available data as of the end of October, foreign central banks had liquidated a record $403 billion in Treasuries in the LTM period. 

However, it is what happened after this date that is more interesting, and while we won't have official TIC data for December until mid-February, a convenient proxy for foreign central bank Treasury activity is the Fed's custody account, where according to the latest data as of December 21, there has been a substantial swing in purchasing intentions.

As shown in the chart below, after a year and a half of one-way selling, the Treasury holdings in the Fed's custody account have jumped by $60 billion in the past month...

... leading to one of the most acute sell-to-buy swings since the start of 2015, when just like now, conventional wisdom was to dump Treasuries, only to result in a dramatic plunge in yields to the mid-1% range.

So with foreigners once again aggressively buying US paper, does it mean that the recent rout is over? We don't know the answer, although as we reported two days ago, someone believes they do, and are aggressively loading up on calls for TLT (the long-end Treasury Bond ETF)  
which as we showed is the most active with call volumes (bullish bonds, lower rates) more than double the average, with over $1.3 billion notional in February $126 Calls (which will payoff if rates drop to around 2.00% by then).

As Susquehanna noted earlier in the week, the trader established a low-delta, speculative upside position. And he is not alone in his bid for those $126 Calls: 

And since a $126 TLT implies around a 2.00 to 2.05% 10Y yield...

... that means at least one trader is convinced that yields will tumble in the immediate future, with or without an offsetting plunge in stocks as the reflation thesis is unwound.

Will it happen? Again, it remains to be seen, but recall that the short interest in the Tsy complex is at all time highs.

All that is needed to spark a short covering stampede is a sign that the "whale" buyers are coming back, which in the case of central banks they now are...