“U.S. Treasuries still look pretty darn good in relation to much of what’s happening in the rest of the world,” Kohli added.
For instance, TD Securities argues that higher-yielding Treasuries will attract European investors and U.S. assets could also benefit from traders growing their dollar exposure, reports Jamie Chisholm for the Financial Times.
The yields on 30-year Germany Bunds were 0.96%.
“Over time, we would expect investors to move from Bunds into higher-yielding Treasuries,” TD Securities told the Financial Times. “When Bunds sold off on taper tantrum fears, the spread compressed from 184bp in April 2015 to 146bp in June 2015. It was a similar situation after the December disappointment from the ECB where the spread tightened from 171bp in early December to 164bp by the end of December.”
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