We’re living in a world of negative interest rates. Central banks from Japan to Switzerland have implemented negative rates in a bid to catalyse economic growth, sending investors scurrying to find yield elsewhere. One popular destination for these investors has been the US, and in particular, the US Treasury market. In a note out August 22, George Saravelos at Deutsche Bank took a look at foreign investors buying US bonds, and using currency hedging to eliminate FX risk. The note said: “Foreigners have fled negative rates and flocked to US fixed income to take advantage of positive rates. Currency hedging these ... (full story)