ASIAN and European investors are pouring money into US dollar corporate bonds, which have grown more enticing as longer-term US yields have risen and hedging costs have fallen.
A European investor can earn about 1.03% on an average US highgrade corporate bond after hedging, or around 0.8 percentage point above euro-denominated counterparts, according to data compiled by Bloomberg. That’s one of the biggest advantages for US notes since early 2017. A month ago, that gain would have been just 0.56 percentage point.
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