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European investors are getting a ‘green light’ to buy U.S. debt as currency hedging costs decline

Joy Wiltermuth
European investors are getting a ‘green light’ to buy U.S. debt as currency hedging costs decline

Costs are finally coming down for European investors looking to ride the U.S. debt rally, while also hedging currency risks. U.S. debt has been one of the few spots globally where yields remain positive, even if 10-year Treasurys (BX:TMUBMUSD10Y) currently yield only about 2%. Riskier U.S. corporate bonds with junk-ratings have been a favorite and can yield more than 6%, but not for European investors who buy U.S. dollar assets and need to hedge into euros.